BFC Financial Corporation
As filed with the United States Securities and Exchange
Commission on May 18, 2007
Registration
No. 333-141632
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
AMENDMENT NO. 1
TO
Form S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
BFC FINANCIAL
CORPORATION
(Exact name of registrant as
specified in its charter)
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Florida
(State or other
jurisdiction of incorporation or organization)
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59-2022148
(I.R.S. Employer
Identification No.)
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2100 West Cypress Creek
Road
Fort Lauderdale, Florida
33309
(954) 940-4900
(Address, including zip code,
and telephone number, including area code, of
registrants principal
executive offices)
Alan B. Levan
BFC Financial
Corporation
2100 West Cypress Creek
Road
Fort Lauderdale, Florida
33309
(954) 940-4900
(Name, address, including zip
code, and telephone number, including area code,
of agent for service)
Copies to:
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Alison W.
Miller, Esq.
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Gilbert G.
Menna, Esq.
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K. Taylor
White, Esq.
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Suzanne D.
Lecaroz, Esq.
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Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A.
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Goodwin Procter LLP
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150 West Flagler Street,
Suite 2200
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Exchange Place
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Miami, Florida 33130
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53 State Street
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(305) 789-3200
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Boston, MA 02109
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(617) 570-1000
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Approximate date of commencement of proposed sale to the
public: As soon as practicable after this
Registration Statement becomes effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box. o
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following
box. o
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that
shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the
following box. o
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed to
register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities
Act, check the following
box. o
CALCULATION OF REGISTRATION
FEE
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Proposed Maximum
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Proposed Maximum
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Title of Each Class of Securities
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Amount to
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Offering Price per
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Aggregate Offering
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Amount of
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to be Registered
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be Registered
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Unit(1)
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Price(1)
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Registration Fee(2)
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Class A Common Stock
($0.01 par value)
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11,500,000
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$
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4.65
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$
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53,475,000
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$
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1,641.68
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(1)
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Estimated solely for the purpose of
calculating the registration fee pursuant to Rule 457 under
the Securities Act of 1933 and based upon the average of the
high and low prices of the registrants Class A Common
Stock on the NYSE Arca Stock Exchange as of a date within five
business days prior to the initial filing of this Registration
Statement.
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(2)
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Previously paid in connection with
the initial filing of this Registration Statement on
March 29, 2007.
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The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933, or until the Registration
Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.
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SUBJECT TO COMPLETION, DATED
MAY 18, 2007
PROSPECTUS
BFC Financial
Corporation
10,000,000 Shares
Class A Common
Stock
We are a holding company that invests in and acquires businesses
in diverse industries. Our ownership interests include direct
and indirect interests in businesses in a variety of sectors,
including consumer and commercial banking, investment banking,
homebuilding and master-planned community development,
time-share and vacation ownership, an Asian-themed restaurant
chain and various real estate and venture capital investments.
We are offering 10,000,000 shares of our Class A
Common Stock, par value $0.01 per share, at a price of
$ per share. Our Class A
Common Stock is listed on the NYSE Arca Stock Exchange, or the
NYSE Arca, under the trading symbol BFF. On
May 16, 2007, the last reported sale price of our
Class A Common Stock on the NYSE Arca was $4.30 per share.
Investing in our Class A Common Stock involves risks.
See Risk Factors beginning on page 11 for a
discussion of certain factors you should consider before
deciding to invest in shares of our Class A Common
Stock.
These securities are not savings accounts, deposits or other
obligations of any bank and are not insured by the Federal
Deposit Insurance Corporation or any other governmental
agency.
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Per Share
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Total
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Public offering price
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$
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$
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Underwriting discounts
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$
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$
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Proceeds, before expenses, to us
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$
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$
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The underwriters are offering shares of our Class A Common
Stock as described under the section of this prospectus entitled
Underwriting. We have granted the underwriters a
30-day
option to purchase up to an additional 1,500,000 shares of
our Class A Common Stock at the public offering price, less
underwriting discounts and commissions, solely to cover
over-allotments.
Neither the Office of Thrift Supervision, the Securities and
Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to
the contrary is a criminal offense.
The underwriters expect to deliver the shares to purchasers on
or
about ,
2007.
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Ladenburg Thalmann & Co.
Inc.
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The date of this prospectus
is ,
2007.
You should rely only on the information contained in or
incorporated by reference into this prospectus. We have not, and
the underwriters have not, authorized any other person to
provide you with different information. If anyone provides you
with different or inconsistent information, you should not rely
on it. The information in this prospectus may only be accurate
as of the date appearing on the cover page of this prospectus
and any information incorporated by reference is only accurate
as of the date of such documents, regardless of the time this
prospectus is delivered or our Class A Common Stock is
sold.
TABLE OF CONTENTS
We are not making an offer to sell the shares in any
jurisdiction where the offer or sale is not permitted. No action
is being taken in any jurisdiction outside the United States to
permit a public offering of our Class A Common Stock or the
possession or distribution of this prospectus in any such
jurisdiction. Persons who come into possession of this
prospectus in jurisdictions outside of the United States are
required to inform themselves about and to observe any
restrictions as to this offering and the distribution of this
prospectus applicable in that jurisdiction.
Unless otherwise indicated, when we refer to BFC,
the Company, we, our,
us or our Company in this prospectus, we
are referring to BFC Financial Corporation and all of its
consolidated subsidiaries. When we refer to BankAtlantic
Bancorp, we are referring to BankAtlantic Bancorp, Inc.
and all of its subsidiaries. When we refer to
BankAtlantic, or the Bank, we are
referring to BankAtlantic, BankAtlantic Bancorps
wholly-owned federal savings bank subsidiary. When we refer to
Levitt, we are referring to Levitt Corporation and
all of its subsidiaries. When we refer to Levitt and
Sons, we are referring to Levitt and Sons, LLC and all of
its subsidiaries. When we refer to Core Communities,
we are referring to Core Communities, LLC and all of its
subsidiaries. When we refer to Bluegreen, we are
referring to Bluegreen Corporation and all of its subsidiaries.
When we refer to Benihana, we are referring to
Benihana, Inc. When we refer to Stifel, we are
referring to Stifel Financial Corp. and all of its subsidiaries.
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PROSPECTUS
SUMMARY
This summary highlights information contained elsewhere or
incorporated by reference in this prospectus. Because this is a
summary, it may not contain all of the information that is
important to you. Therefore, you should also read the more
detailed information set forth in this prospectus, our
consolidated financial statements and the other information that
is incorporated by reference in this prospectus before making a
decision to invest in our Class A Common Stock. Unless
otherwise indicated, the information in this prospectus assumes
that the underwriters do not exercise their over-allotment
option to purchase additional shares of our Class A Common
Stock.
BFC
Financial Corporation
We are a holding company that invests in and acquires businesses
in diverse industries. Our ownership interests include direct
and indirect interests in businesses in a variety of sectors,
including consumer and commercial banking, investment banking,
homebuilding and master-planned community development,
time-share and vacation ownership, an Asian-themed restaurant
chain and various real estate and venture capital investments.
Our activities primarily relate to monitoring and managing our
investments, particularly the operations of our two largest
investments, BankAtlantic Bancorp (NYSE: BBX) and Levitt (NYSE:
LEV). As of March 31, 2007, we controlled more than 50% of
the vote of BankAtlantic Bancorp and Levitt and, as a result,
they are consolidated in our financial statements. We also hold
a direct non-controlling minority investment in Benihana
(NASDAQ: BNHN), which operates Asian-themed restaurant
chains in the United States, and hold an indirect
non-controlling minority investment in Stifel (NYSE: SF), the
holding company of Stifel, Nicolaus & Company, Inc.
and Ryan Beck & Co., Inc. BankAtlantic Bancorp became
Stifels largest shareholder as a result of its sale of
Ryan Beck & Co., Inc. to Stifel in February 2007. We also
own 100% of Cypress Creek Capital, Inc., a real estate
investment banking and investment company that provides equity
capital, debt placement and advisory services to developers in
the residential and commercial real estate markets.
On January 30, 2007, we entered into a merger agreement
with Levitt which, if the transactions contemplated by the
merger agreement are completed, will result in Levitt becoming
our wholly-owned subsidiary. See Proposed
Merger with Levitt.
We typically make investments with a long-term investment
horizon and our investment approach contemplates little
portfolio turnover. Our major consolidated subsidiaries are:
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BankAtlantic Bancorp (NYSE: BBX), a Florida-based financial
services holding company. BankAtlantic Bancorp owns
BankAtlantic, a federally chartered, federally insured savings
bank. At March 31, 2007, BankAtlantic had $6.2 billion
of assets and a network of more than 93 branches in southeast
Florida and the Tampa Bay and Orlando areas, primarily in the
metropolitan areas surrounding the cities of Miami,
Ft. Lauderdale, West Palm Beach, Tampa and Orlando. These
cities are located in the heavily-populated Florida counties of
Miami-Dade, Broward, Palm Beach, Hillsborough, Pinellas and
Orange. As a result of its sale of Ryan Beck & Co,
Inc., a full service, diversified investment banking and
brokerage firm, to Stifel (NYSE: SF) on February 28, 2007, Bank
Atlantic Bancorp holds approximately 16% of the outstanding
shares of common stock of Stifel. While by virtue of our
ownership interest in BankAtlantic Bancorp we are regulated by
the Office of Thrift Supervision, or OTS, as a unitary
savings bank holding company, we are not subject to any
material regulatory restrictions on our activities.
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Levitt (NYSE: LEV), a homebuilding and real estate development
company with activities throughout the southeastern United
States, which operates through Levitt and Sons, its wholly-owned
homebuilding subsidiary, and Core Communities, its wholly-owned
master-planned community development subsidiary. Levitt also
holds approximately 31% of the outstanding shares of common
stock of Bluegreen (NYSE: BXG), which acquires, develops,
markets and sells time-share vacation ownership
interests primarily in drive-to vacation
destinations as well as residential home sites in some cases on
properties featuring golf courses or other related amenities.
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Our
Business Objective and Strategies
Our principal business objective is to create long-term value
for our shareholders through profitable growth of our portfolio
companies and appreciation in the value of our investments. In
order to achieve this
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objective, our key strategies are to actively monitor and manage
our existing investments and to identify and make new control or
minority investments in diverse businesses that have:
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management teams with extensive experience and knowledge in
their industries;
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solid business platforms and long-term sustainability;
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the ability to grow as part of the BFC platform and through our
investment approach; and
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industry, business and management characteristics conducive to
and compatible with our long-term buy and hold
investment philosophy.
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We support the growth of our portfolio companies in a variety of
ways, which may include, depending on the circumstances of our
investment and level of control:
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board of directors oversight and counsel;
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financing advice and assistance;
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strategic planning;
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risk management;
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investment expertise and assistance with add-on acquisitions;
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strengthening of infrastructure and operations;
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management recruitment and retention; and
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an ownership and corporate governance environment that we
believe is conducive to management teams performing to their
full potential for the long-term profitable growth of portfolio
companies.
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Although our current holdings primarily consist of minority
positions in public companies, our recent strategy is to focus
primarily on investment opportunities that will enable us to own
80-100% of a business, which is more tax efficient and has the
potential to provide us with greater cash flow.
Our
Strengths
Through many transactions, including mergers, acquisitions,
divestitures, public to private, private to public,
partnerships, recapitalizations, and restructurings, we believe
our senior management team has earned a solid reputation for
supporting management and building companies.
Our key accomplishments include:
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Creating an environment where businesses are managed for the
long-term.
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We believe our investment approach supports and facilitates a
culture at our portfolio companies of decision-making based on
long-term goals. Recently, we supported the decisions made at
BankAtlantic and Levitt to implement or continue strategic,
long-term initiatives despite the near-term impact of such
initiatives on earnings.
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BankAtlantics branch network expansion and related
Floridas Most Convenient Bank initiatives
adversely impacted its near-term results by increasing operating
expenses.
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Levitt continued to make investments in its infrastructure,
systems and personnel to position itself for the future despite
the near-term impact of such investments on its results.
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As a long-term investor, we supported BankAtlantic and Levitt in
implementing these initiatives, which we believe position them
for long-term growth.
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Successfully managing and growing our investments.
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BankAtlantic had net income of $9.5 million for the fiscal
year ended September 30, 1986, the year prior to our
acquisition of control, compared to net income of
$55.8 million and $36.3 million for the fiscal years
ended December 31, 2005 and 2006, respectively.
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Ryan Beck was acquired in 1998 for approximately
$38.1 million, and BankAtlantic Bancorp made additional
investments of approximately $20.0 million in Ryan Beck
during its ownership. On February 28, 2007, Ryan Beck was
merged into a wholly-owned subsidiary of Stifel in a stock
transaction. As a result of the transaction, BankAtlantic
Bancorp received 2,377,354 shares
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of Stifels common stock valued at $125 million and
consequently became Stifels largest shareholder, owning
approximately 16% of the outstanding shares of Stifels
common stock. Pursuant to the terms of the merger agreement,
Stifel is also required to deliver either five-year warrants to
acquire approximately 500,000 shares of Stifels
common stock at an exercise price of $36.00 per share or
$20 million in cash prior to June 30, 2007 as well as
contingent earn-out payments based on (i) defined private
client revenues of Ryan Beck during the two-year period
commencing on February 28, 2007 up to a maximum of
$40,000,000 and (ii) defined investment banking revenues of
Ryan Beck equal to 25% of the amount by which such revenues
exceed $25,000,000 during each of the two consecutive
twelve-month periods commencing on February 28, 2007. Each
of the contingent earn-out payments is payable, at Stifels
election, in cash or shares of Stifels common stock.
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Core Communities, which constitutes Levitts Land Division,
had a loss of $3.0 million for the period from May 17,
1996 (its inception under its previous ownership) through our
acquisition on December 31, 1996, compared to net income of
$31.4 million and $11.5 million for the years ended
December 31, 2005 and 2006, respectively.
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Levitt acquired Levitt and Sons in late 1999. For the year ended
December 31, 1998, Levitt and Sons had net income of
$4.5 million, compared to net income of $13.8 million,
$33.0 million and $22.2 million for the years ended
December 31, 2003, 2004 and 2005, respectively. While
Levitt and Sons had net loss of $8.9 million in 2006,
Levitts management believes that Levitt and Sons
2006 results reflect the current downturn in the homebuilding
industry as well as expenses associated with investments in
infrastructure, systems and personnel that Levitts
management believes will contribute to future performance when
the homebuilding market returns to normal levels of growth.
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Bluegreens net income for the year ended December 31,
2001, the year prior to Levitts principal share purchase,
was $9.7 million, compared to $46.6 million and
$29.8 million for the years ended December 31, 2005
and 2006, respectively.
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Assembling and retaining a strong, experienced executive
management team.
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Our senior officers have substantial financing and acquisition
experience across a wide range of industries as well as
considerable business and operating experience in financial
services, commercial and retail banking, investment banking,
real estate, homebuilding, land development, time-share,
hospitality, travel, airlines, telecommunications, construction
and national restaurant chains.
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Since 1978, Alan B. Levan has been the Chairman of our board of
directors and the President and Chief Executive Officer of our
Company or its predecessors. He has been Chairman and Chief
Executive Officer of BankAtlantic Bancorp since 1994 and
Chairman of the board of directors of BankAtlantic since 1987.
He is Chairman of the Board and Chief Executive Officer of
Levitt and Chairman of Bluegreen.
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John E. Abdo has served as a director of our Company since 1988
and Vice Chairman of the board of directors of our Company since
1993. He has been Vice Chairman of BankAtlantic since April 1987
and Chairman of the Executive Committee of BankAtlantic since
October 1985. He has been a director and Vice Chairman of
BankAtlantic Bancorp since 1994, Vice Chairman of Levitt since
April 2001 and served as President of Levitt from 1985 to 2005.
Mr. Abdo also has been a director of Benihana since 1990
and Vice Chairman of Bluegreen since 2002.
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The senior operating executives at each of Levitt and Sons and
Core Communities at the time of our investments continue to
serve as either executives of, or post-retirement consultants
to, these companies.
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Our Major
Portfolio Company Investments
BFC is a holding company and has no significant operations other
than activities relating to the monitoring and managing of
existing investments and the identification, analysis and in
appropriate cases, acquisition of new investments. BFC has no
independent sources of cash-flow from operations except to the
extent dividends, management fees and similar cash payments are
made to BFC by its subsidiaries and investment holdings.
BFCs management or other fees and dividends from
BankAtlantic Bancorp, Levitt and Benihana do not currently cover
BFCs ongoing operating expenses. Therefore, as a
stand-alone entity, BFC currently generates a loss.
BankAtlantic
BFC began investing in Atlantic Federal Savings and Loan,
BankAtlantics predecessor, in 1983, culminating in the
acquisition in 1987 of a controlling position, which at one
point approached 80%. We made our investment at a time when we
believed that the bank and thrift industry was poised for both
significant change and growth. Atlantic Federal had been in
business since the early 1950s. We believed it was located in a
high growth region of the country and had an attractive local
presence in its market, but in 1983 was an underperforming and
undercapitalized traditional savings and loan institution. In
the late 1980s, we assembled a new management team at the
Bank focused on closing unprofitable branches, reducing expenses
and redeploying assets. A decision was made to transition the
institution from a classic thrift model to a commercial bank
model, which was designed to put Atlantic Federal on a sound
financial footing and prepare it for successful growth in the
Florida marketplace. In 2002, we initiated BankAtlantics
Floridas Most Convenient Bank strategy. This
strategy includes offering free checking,
seven-day
banking, extended lobby hours, including some stores open from
7:30 a.m. until midnight, a
24-hour
customer service center and other new products and services that
are an integral part of BankAtlantics plan to position
itself as a customer-oriented bank and increase its core deposit
accounts.
Levitt
Corporation
Through BankAtlantic Bancorp we completed two significant
acquisitions in the real estate and homebuilding industries. In
1997 and 1999, Levitt, which at those times was a wholly-owned
subsidiary of BankAtlantic Bancorp, acquired land developer Core
Communities and homebuilder Levitt and Sons, respectively. In
December 2003, Levitt was spun-off to the shareholders of
BankAtlantic Bancorp, thereby resulting in BFC becoming the
direct controlling shareholder of Levitt. Each of the two
acquisitions, which today comprise the primary holdings of
Levitt, is described below.
Core
Communities
Levitt acquired Core Communities in 1997 for approximately
$20 million. Core Communities is a developer of
master-planned communities, which involves purchasing large
tracts of raw land, obtaining necessary entitlements and
approvals and preparing the property for sale in tracts to
residential and commercial developers. In the early to
mid-1990s, we believed that the south and central coasts of
Florida would experience significant growth in the development
and population of new communities. Levitt looked at selected
investment opportunities and became acquainted with the St.
Lucie West Holding Company, the predecessor to Core Communities,
and its management team. We believed that this experienced
management team could successfully implement their land
development strategy with the appropriate support, capital,
corporate governance and ownership structure. Levitt was able to
acquire the then-unprofitable company in 1997 from a foreign
investment fund. Supported by our ownership structure and an
additional $4.8 million in post-acquisition capital from
BankAtlantic, Core Communities was able to complete the
development of its initial
4,600-acre
community, St. Lucie West, and to assemble the acreage for both
its second community, Tradition Florida, located in Port St.
Lucie, Florida, and its third community, Tradition South
Carolina, located in Hardeeville, South Carolina. Tradition
Florida is planned to ultimately include more than 8,200 total
acres, including approximately five miles of frontage on
Interstate 95, and Tradition South Carolina currently
encompasses 5,400 acres and is planned to include
1.5 million square feet of commercial space.
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Levitt
and Sons
Levitt acquired Levitt and Sons in late 1999 for approximately
$27 million. We had followed the emergence and growth of
the larger public homebuilders, and after reviewing other
homebuilding opportunities, concluded that Levitt and Sons
offered the right combination of management, geographical focus,
brand name, experience and growth potential. Levitt and
Sons predecessor, which built the Levittowns after World
War II in New Jersey, New York and Pennsylvania, was owned
by a New York-based private company. Prior to our acquisition,
most of Levitt and Sons free cash flow was distributed to
its parent, which substantially restricted the companys
growth. Although no additional capital contribution was made in
connection with our acquisition, the management team, with our
encouragement and support, began reinvesting Levitt and
Sons free cash flow into the growth and expansion of its
business.
Bluegreen
BankAtlantic Bancorp began investing in the common stock of
Bluegreen in 2001 through open market common stock purchases
after becoming acquainted with its senior management. We had
observed the entry into the time-share market of branded
hospitality companies such as Marriott, Hyatt, Hilton and others
as well as the consolidation of the industry. We also believed
that demographic and leisure industry trends presented growth
opportunities for time-share companies that were reasonably
financed, not over-leveraged and that had developed sound and
effective sales and marketing programs. In April 2002, nearly a
year after BankAtlantic Bancorp made its first open market
purchase, Levitt purchased a large stake in Bluegreen for
$53.8 million by buying shares of Bluegreens common
stock from two of Bluegreens largest shareholders, the
larger of which was a diversified real estate investment fund.
Levitt acquired BankAtlantic Bancorps holdings in
Bluegreen in connection with the spin-off of Levitt, and as of
December 31, 2006, Levitt owned approximately 31% of the
outstanding common stock of Bluegreen. Since Levitts
initial investment in Bluegreen, we have supported
Bluegreens management teams focus on
Bluegreens growth and development plans.
Benihana
We agreed in June 2004 to invest a total of $20 million in
Benihana in the form of privately placed convertible preferred
stock. The convertible preferred stock is convertible into
Benihanas Common Stock, which is quoted on the NASDAQ
Global Market. We invested $10 million in July 2004 and an
additional $10 million in August 2005. If we were to
convert our investment in Benihana, it would represent
approximately 26% of the total voting power of Benihana and 10%
of the total equity in Benihana with an aggregate market value
of $30.3 million at May 10, 2007. Benihana had been
providing its unique dining experience for over 40 years
but, in our view, had not realized its potential for growth and
expansion, particularly when compared to other Asian-themed
dining companies. Following our investments in 2004 and 2005,
Benihana commenced a strategy to redesign, remodel and modernize
its teppenyaki restaurants and expand its three major chain
concepts, particularly its chain of RA Sushi
restaurants. Benihana had net income attributable to common
shareholders of $9.0 million for the fiscal year ended
March 28, 2004, the year prior to our principal investment
in Benihana, compared to net income attributable to common
shareholders of $13.1 million for the fiscal year ended
March 26, 2006 and $9.6 million for the ten four-week
periods ended December 31, 2006. As quoted on the NASDAQ
Global Market, the price of Benihanas Common Stock as of
the close of business on July 1, 2004, the date our initial
investment was funded, was $15.05, compared to $28.79 as of the
close of business on May 10, 2007.
Proposed
Merger with Levitt
On January 30, 2007, we entered into a merger agreement
with Levitt which, if the transactions contemplated by the
merger agreement are completed, will result in Levitt becoming
our wholly-owned subsidiary. We currently own approximately 17%
of Levitts common stock, representing more than 50% of the
aggregate voting control of Levitt. If the merger is
consummated, Levitts shareholders (other than us and
shareholders who exercise their appraisal rights) will receive
2.27 shares of our Class A Common Stock for each share
of Levitt Class A Common Stock they own (subject to
adjustment in accordance with the terms of the merger
agreement). The closing of the merger is subject to a number of
conditions, including the affirmative vote of the holders of a
majority of the outstanding shares of Levitt Class A Common
Stock as well as the affirmative
5
vote of the holders of a majority of the shares of Levitt
Class A Common Stock actually voted on the merger not
counting the votes of BFC and certain other shareholders of
Levitt. There is no assurance that the merger will be
consummated. On May 7, 2007, Levitt filed a registration
statement on Form
S-3 with the
SEC with respect to a proposed distribution to its shareholders
of rights to purchase up to $200 million of shares of its Class
A Common Stock. In the event the merger is not consummated,
Levitt has indicated that it intends to pursue the rights
offering to its shareholders, in which case, we intend to
support Levitt and participate fully in the rights offering.
NYSE Arca
Listing
On June 20, 2006, we announced that our Class A Common
Stock was approved for listing on the NYSE Arca under the symbol
BFF and on June 22, 2006, we commenced trading
on the NYSE Arca. Prior to that time, our Class A Common
Stock was traded on the NASDAQ National Market.
Risk
Factors
Investing in our Class A Common Stock involves a high
degree of risk. You should carefully read the section entitled
Risk Factors beginning on page 11 for an
explanation of these risks before investing in our Class A
Common Stock. In particular, the following risks and
uncertainties, among others, may adversely impact our business,
financial condition or results of operations:
|
|
|
|
|
We depend on dividends for a significant portion of our cash
flow. The payment to us of dividends is subject to declaration
by the boards of directors of our portfolio companies, and
regulatory restrictions and the terms of indebtedness may limit
their ability to pay dividends;
|
|
|
|
We have in the past incurred operating cash flow deficits that
we expect will continue in the future;
|
|
|
|
Levitt engages in real estate activities, which are speculative
and involve a high degree of risk, and if the merger with Levitt
is consummated, we will increase our exposure to the
homebuilding industry, which continues to experience significant
weakness; and
|
|
|
|
Adverse events in Florida could adversely impact
BankAtlantics business and Levitts real estate
operations.
|
Our
Corporate Information
Our principal executive offices are located at 2100 West
Cypress Creek Road, Fort Lauderdale, Florida 33309. Our
telephone number is
(954) 940-4900.
Our website is located at
www.bfcfinancial.com. Information contained on
our website is not incorporated into, and does not form a part
of, this prospectus or any other report or document we file or
furnish with the Securities and Exchange Commission (the
SEC).
6
The
Offering
|
|
|
Common stock offered by BFC |
|
10,000,000 shares of Class A Common Stock(1) |
|
|
|
Common stock to be outstanding after the offering |
|
38,756,088 shares of Class A Common Stock(2) |
|
|
|
|
|
7,090,653 shares of Class B Common Stock(3) |
|
|
|
Over-allotment option |
|
1,500,000 shares of Class A Common Stock |
|
|
|
Voting Rights |
|
Holders of our Class A Common Stock are entitled to one
vote per share, and our Class A Common Stock possesses in
the aggregate a fixed 22% of the total voting power of all of
our common stock. The holders of our Class B Common Stock
are entitled to a number of votes per share which represents in
the aggregate a fixed 78% of the total voting power of all of
our common stock. Alan B. Levan, our Chairman of the Board and
Chief Executive Officer, and John E. Abdo, our Vice Chairman of
the Board, may be deemed under SEC rules to beneficially own
shares of our Class A Common Stock and Class B Common
Stock representing in the aggregate 52.7% of our total common
stock and 77.1% of the total voting power of all of our common
stock at March 31, 2007. The holders of our Class A
Common Stock and Class B Common Stock vote as a single
class, except as may be required by law or as provided in our
Articles of Incorporation. |
|
|
|
Dividends |
|
Holders of our Class A Common Stock and Class B Common
Stock participate equally in dividends on a per share basis.
Stock dividends and other non-cash distributions on our
Class A Common Stock are identical to those issued on our
Class B Common Stock, except that a stock dividend to
holders of our Class A Common Stock may be declared and
issued in the form of Class A Common Stock while a stock
dividend to holders of our Class B Common Stock may be
issued in either the form of Class A Common Stock or
Class B Common Stock in the discretion of our board of
directors. Since our inception, we have not paid any cash
dividends on our common stock. |
|
Convertibility |
|
Our Class A Common Stock is not convertible. Our
Class B Common Stock is convertible at the holders
discretion into Class A Common Stock on a
share-for-share
basis. |
|
|
|
Use of Proceeds |
|
If the proposed merger with Levitt is consummated, we currently
intend to use the net proceeds of this offering primarily to
provide Levitt, as our wholly-owned subsidiary, with working
capital. If the proposed merger with Levitt is not consummated,
we currently intend to use the net proceeds of this offering
primarily to participate fully in the rights offering made by
Levitt or otherwise make additional debt or equity investments
in Levitt. The net proceeds of this offering may also be used
for our general corporate purposes, including working capital
and potential new investments. See the section of this
prospectus entitled Use of Proceeds. |
|
|
|
Class A Common Stock NYSE Arca Symbol |
|
BFF |
|
|
|
(1)
|
|
Does not include
1,500,000 shares of Class A Common Stock issuable upon
exercise of the underwriters over-allotment option.
|
|
|
|
(2)
|
|
As of May 8, 2007. Does not
include (i) an additional 1,500,000 shares of
Class A Common Stock issuable upon exercise of the
underwriters over-allotment option,
(ii) 1,562,000 shares of Class A Common Stock
issuable upon conversion of the Companys 5% Cumulative
Convertible Preferred Stock, (iii) 468,000 shares of
Class A Common Stock issuable upon the exercise of
outstanding options with a weighted average exercise price of
$7.63 per share or (iv) approximately
37,533,953 shares of Class A Common Stock that will be
issued to Levitts shareholders and approximately 4,300,000
shares of Class A Common Stock that will be issuable to
holders of options to purchase shares of Levitt Class A
Common Stock if the proposed merger with Levitt is consummated.
|
|
|
|
(3)
|
|
As of May 8, 2007. Does not
include 1,139,087 shares of Class B Common Stock
issuable upon the exercise of outstanding options with a
weighted average exercise price of $3.75 per share.
|
7
SUMMARY
CONSOLIDATED FINANCIAL AND OTHER DATA
The following table sets forth summary consolidated financial
and other data for BFC as of, and for the years ended,
December 31, 2004, 2005 and 2006 and as of, and for the
three months ended, March 31, 2006 and 2007. Certain
summary consolidated financial and other data presented below as
of, and for the years ended, December 31, 2004, 2005 and
2006 are derived from our consolidated financial statements. The
summary consolidated financial and other data presented below as
of, and for the three months ended, March 31, 2006 and 2007
are derived from our unaudited consolidated financial statements
and reflect, in the opinion of management, all adjustments
(consisting only of normal recurring adjustments) necessary for
a fair statement of such data. Results for the three months
ended March 31, 2007 are not necessarily indicative of
results that may be expected for the entire year or any future
period. The following table is a summary and should be read in
conjunction with Managements Discussion and Analysis
of Results of Operations and Financial Condition and the
consolidated financial statements and related notes contained in
our Annual Report on
Form 10-K
for the year ended December 31, 2006 and Amendment
No. 1 to our Quarterly Report on Form 10-Q/A for the
quarter ended March 31, 2007, which are incorporated herein
by reference.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
|
|
|
|
|
Months Ended
|
|
For the Years Ended
|
|
|
March 31,
|
|
December 31,
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
|
(Dollars in thousands, except for per share data)
|
|
Income
Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BFC Activities
|
|
$
|
1,450
|
|
|
$
|
1,003
|
|
|
$
|
3,682
|
|
|
$
|
3,129
|
|
|
$
|
5,683
|
|
Financial Services
|
|
|
129,107
|
|
|
|
117,316
|
|
|
|
507,746
|
|
|
|
445,537
|
|
|
|
358,703
|
|
Homebuilding & Real
Estate Development
|
|
|
145,968
|
|
|
|
128,242
|
|
|
|
583,152
|
|
|
|
574,824
|
|
|
|
558,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
276,525
|
|
|
|
246,561
|
|
|
|
1,094,580
|
|
|
|
1,023,490
|
|
|
|
923,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BFC Activities
|
|
|
3,417
|
|
|
|
3,170
|
|
|
|
12,370
|
|
|
|
9,665
|
|
|
|
7,452
|
|
Financial Services
|
|
|
132,779
|
|
|
|
106,875
|
|
|
|
474,311
|
|
|
|
381,916
|
|
|
|
280,431
|
|
Homebuilding & Real
Estate Development
|
|
|
146,035
|
|
|
|
129,134
|
|
|
|
606,655
|
|
|
|
498,760
|
|
|
|
481,618
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
282,231
|
|
|
|
239,179
|
|
|
|
1,093,336
|
|
|
|
890,341
|
|
|
|
769,501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings from
unconsolidated affiliates
|
|
|
2,893
|
|
|
|
771
|
|
|
|
10,935
|
|
|
|
13,404
|
|
|
|
19,603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing
operations
|
|
|
(2,813
|
)
|
|
|
8,153
|
|
|
|
12,179
|
|
|
|
146,553
|
|
|
|
173,326
|
|
(Benefit) provision for income taxes
|
|
|
(272
|
)
|
|
|
2,514
|
|
|
|
(528
|
)
|
|
|
59,566
|
|
|
|
70,920
|
|
Noncontrolling interest
|
|
|
(915
|
)
|
|
|
5,729
|
|
|
|
13,404
|
|
|
|
79,267
|
|
|
|
90,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing
operations
|
|
|
(1,626
|
)
|
|
|
(90
|
)
|
|
|
(697
|
)
|
|
|
7,720
|
|
|
|
12,018
|
|
(Loss) income from discontinued
operations, net of noncontrolling interest and income taxes
|
|
|
1,053
|
|
|
|
(209
|
)
|
|
|
(1,524
|
)
|
|
|
5,054
|
|
|
|
2,212
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
(573
|
)
|
|
|
(299
|
)
|
|
|
(2,221
|
)
|
|
|
12,774
|
|
|
|
14,230
|
|
5% Preferred Stock dividends
|
|
|
(188
|
)
|
|
|
(188
|
)
|
|
|
(750
|
)
|
|
|
(750
|
)
|
|
|
(392
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income allocable to
common stock
|
|
$
|
(761
|
)
|
|
$
|
(487
|
)
|
|
$
|
(2,971
|
)
|
|
$
|
12,024
|
|
|
$
|
13,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share Data(a),(c),
(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per share
from continuing operations
|
|
$
|
(0.05
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.24
|
|
|
$
|
0.48
|
|
Discontinued operations
|
|
|
0.03
|
|
|
|
|
|
|
|
(0.05
|
)
|
|
|
0.18
|
|
|
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per share of
common stock
|
|
$
|
(0.02
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
0.42
|
|
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share
from continuing operations
|
|
$
|
(0.05
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
0.22
|
|
|
$
|
0.40
|
|
Discontinued operations
|
|
|
0.03
|
|
|
|
(0.01
|
)
|
|
|
(0.05
|
)
|
|
|
0.15
|
|
|
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings per share
of common stock
|
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.37
|
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average number of
common shares outstanding
|
|
|
33,444
|
|
|
|
32,692
|
|
|
|
33,249
|
|
|
|
28,952
|
|
|
|
24,183
|
|
Diluted weighted average number of
common shares outstanding
|
|
|
33,444
|
|
|
|
32,692
|
|
|
|
33,249
|
|
|
|
31,219
|
|
|
|
27,806
|
|
Ratio of earnings to fixed
charges(e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollar deficiency of earnings to
fixed charges(e)
|
|
$
|
916
|
|
|
$
|
1,326
|
|
|
$
|
5,197
|
|
|
$
|
7,217
|
|
|
$
|
4,145
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31,
|
|
As of December 31,
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
|
(Dollars in thousands, except for per share data)
|
|
Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases, net
|
|
$
|
4,625,865
|
|
|
$
|
4,528,530
|
|
|
$
|
4,603,505
|
|
|
$
|
4,628,744
|
|
|
$
|
4,561,073
|
|
Securities
|
|
|
1,130,363
|
|
|
|
1,054,410
|
|
|
|
1,081,980
|
|
|
|
1,064,857
|
|
|
|
1,082,985
|
|
Total assets
|
|
|
7,523,794
|
|
|
|
7,308,003
|
|
|
|
7,605,766
|
|
|
|
7,395,755
|
|
|
|
6,954,847
|
|
Deposits
|
|
|
4,085,022
|
|
|
|
3,960,766
|
|
|
|
3,867,036
|
|
|
|
3,752,676
|
|
|
|
3,457,202
|
|
Securities sold under agreements to
repurchase and federal funds purchased
|
|
|
119,513
|
|
|
|
156,675
|
|
|
|
128,411
|
|
|
|
249,263
|
|
|
|
257,002
|
|
Other borrowings(f)
|
|
|
2,261,784
|
|
|
|
1,978,668
|
|
|
|
2,426,000
|
|
|
|
2,131,976
|
|
|
|
2,086,368
|
|
Shareholders equity
|
|
|
176,761
|
|
|
|
178,368
|
|
|
|
177,585
|
|
|
|
183,080
|
|
|
|
125,251
|
|
Book value per share(d),(g)
|
|
|
4.82
|
|
|
|
4.87
|
|
|
|
4.84
|
|
|
|
5.25
|
|
|
|
4.25
|
|
Return on average equity(b)(h)
|
|
|
(0.32
|
)%
|
|
|
(0.17
|
)%
|
|
|
(1.24
|
)%
|
|
|
8.08
|
%
|
|
|
13.16
|
%
|
BankAtlantic Asset quality
ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets, as a percent
of total loans, tax certificates and real estate owned
|
|
|
1.02
|
%
|
|
|
0.18
|
%
|
|
|
0.55
|
%
|
|
|
0.17
|
%
|
|
|
0.19
|
%
|
Loan loss allowance as a percent of
non-performing loans
|
|
|
195.65
|
%
|
|
|
686.59
|
%
|
|
|
982.89
|
%
|
|
|
605.68
|
%
|
|
|
582.18
|
%
|
Loan loss allowance as a percentage
of total loans
|
|
|
1.08
|
%
|
|
|
0.94
|
%
|
|
|
0.94
|
%
|
|
|
0.88
|
%
|
|
|
1.00
|
%
|
Capital Ratios for
BankAtlantic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk based capital
|
|
|
12.11
|
%
|
|
|
12.21
|
%
|
|
|
12.08
|
%
|
|
|
11.50
|
%
|
|
|
10.80
|
%
|
Tier I risk based capital
|
|
|
10.49
|
%
|
|
|
10.65
|
%
|
|
|
10.50
|
%
|
|
|
10.02
|
%
|
|
|
9.19
|
%
|
Leverage
|
|
|
7.51
|
%
|
|
|
7.75
|
%
|
|
|
7.55
|
%
|
|
|
7.42
|
%
|
|
|
6.83
|
%
|
Levitt Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated margin on sales of
real estate
|
|
$
|
28,390
|
|
|
$
|
23,488
|
|
|
$
|
83,125
|
|
|
$
|
150,030
|
|
|
$
|
143,378
|
|
Consolidated Margin
|
|
|
20.00
|
%
|
|
|
18.71
|
%
|
|
|
14.70
|
%
|
|
|
26.90
|
%
|
|
|
26.10
|
%
|
Homes delivered (units)
|
|
|
362
|
|
|
|
439
|
|
|
|
1,660
|
|
|
|
1,789
|
|
|
|
2,126
|
|
Backlog of homes (units)
|
|
|
1,045
|
|
|
|
1,859
|
|
|
|
1,248
|
|
|
|
1,792
|
|
|
|
1,814
|
|
Backlog of homes (sales value)
|
|
$
|
359,029
|
|
|
$
|
608,437
|
|
|
$
|
438,240
|
|
|
$
|
557,325
|
|
|
$
|
448,647
|
|
Land division acres sold
|
|
|
0
|
|
|
|
56
|
|
|
|
371
|
|
|
|
1,647
|
|
|
|
1,212
|
|
|
|
|
(a)
|
|
Since its inception, the Company
has not paid any cash dividends on its common stock.
|
|
|
|
(b)
|
|
Ratios were computed using
quarterly averages.
|
|
|
|
(c)
|
|
While the Company has two classes
of common stock outstanding, the two-class method is not
presented because the Companys capital structure does not
provide for different dividend rates or other preferences, other
than voting rights, between the two classes.
|
|
|
|
(d)
|
|
I.R.E. Realty Advisory Group, Inc.
(RAG) owns 4,764,282 shares of the
Companys Class A Common Stock and 500,000 shares
of the Companys Class B Common Stock. Because the
Company owns 45.5% of the outstanding common stock of RAG,
2,165,367 shares of the Companys Class A Common
Stock and 227,500 shares of the Companys Class B
Common Stock are eliminated from the number of shares
outstanding for purposes of computing earnings per share and
book value per share.
|
|
|
|
(e)
|
|
The operations, fixed charges and
dividends of BankAtlantic Bancorp and Levitt are not included in
the calculation because those subsidiaries are separate,
publicly traded companies whose Boards of Directors are composed
of individuals, a majority of whom are independent. Accordingly,
decisions made by those Boards, including with respect to the
payment of dividends, are not within the Companys control.
|
|
|
|
(f)
|
|
Other borrowings consist of FHLB
advances, subordinated debentures, notes, mortgage notes
payable, bonds payable, secured borrowings, and junior
subordinated debentures. Secured borrowings were recognized on
loan participation agreements that constituted a legal sale of a
portion of the loan but that were not qualified to be accounted
for as a loan sale.
|
|
|
|
(g)
|
|
Preferred stock redemption price is
eliminated from shareholders equity for purposes of
computing book value per share.
|
|
|
|
(h)
|
|
The return on average equity is
equal to net income (loss) divided by average consolidated
shareholders equity during the respective year.
|
9
SUMMARY
PARENT COMPANY ONLY FINANCIAL DATA
The following table sets forth summary parent company only
financial data for BFC as of, and for the years ended,
December 31, 2004, 2005 and 2006 and as of, and for the
three months ended, March 31, 2006 and 2007. Certain
summary parent company only financial data for BFC presented
below as of, and for the years ended, December 31, 2004,
2005 and 2006 are derived from our consolidated financial
statements. The summary parent company only financial data
presented below as of, and for the three months ended,
March 31, 2006 and 2007 are derived from our unaudited
parent company only financial statements and reflect, in the
opinion of management, all adjustments (consisting only of
normal recurring adjustments) necessary for a fair statement of
such data. Results for the three months ended March 31,
2007 are not necessarily indicative of results that may be
expected for the entire year or any future period. The following
table is a summary and should be read in conjunction with
Managements Discussion and Analysis of Results of
Operations and Financial Condition and the consolidated
financial statements and related notes contained in our Annual
Report on
Form 10-K
for the year ended December 31, 2006 and Amendment No. 1 to
our Quarterly Report on Form 10-Q/A for the quarter ended
March 31, 2007, which are incorporated herein by reference.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the Three
|
|
As of or for the
|
|
|
Months Ended
|
|
Years Ended
|
|
|
March 31,
|
|
December 31,
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
15,910
|
|
|
$
|
19,464
|
|
|
$
|
17,815
|
|
|
$
|
26,683
|
|
|
$
|
1,520
|
|
Investment securities
|
|
|
2,211
|
|
|
|
2,434
|
|
|
|
2,262
|
|
|
|
2,034
|
|
|
|
1,800
|
|
Investment in Benihana, Inc.
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
10,000
|
|
Investment in venture partnerships
|
|
|
904
|
|
|
|
941
|
|
|
|
908
|
|
|
|
950
|
|
|
|
971
|
|
Investment in BankAtlantic Bancorp,
Inc.
|
|
|
113,658
|
|
|
|
112,119
|
|
|
|
113,586
|
|
|
|
112,218
|
|
|
|
103,125
|
|
Investment in Levitt Corporation
|
|
|
57,255
|
|
|
|
58,070
|
|
|
|
57,009
|
|
|
|
58,111
|
|
|
|
48,983
|
|
Investment in and advances to
wholly-owned subsidiaries
|
|
|
2,056
|
|
|
|
1,612
|
|
|
|
1,525
|
|
|
|
1,631
|
|
|
|
31,867
|
|
Loans receivable
|
|
|
1,987
|
|
|
|
1,500
|
|
|
|
2,157
|
|
|
|
2,071
|
|
|
|
3,364
|
|
Other assets
|
|
|
2,516
|
|
|
|
2,821
|
|
|
|
2,261
|
|
|
|
960
|
|
|
|
2,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
216,497
|
|
|
$
|
218,961
|
|
|
$
|
217,523
|
|
|
$
|
224,658
|
|
|
$
|
204,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
10,483
|
|
Advances from and negative basis in
wholly-owned subsidiaries
|
|
|
1,373
|
|
|
|
544
|
|
|
|
1,290
|
|
|
|
462
|
|
|
|
34,636
|
|
Other liabilities
|
|
|
6,636
|
|
|
|
6,615
|
|
|
|
7,351
|
|
|
|
7,417
|
|
|
|
6,929
|
|
Deferred income taxes
|
|
|
31,727
|
|
|
|
33,434
|
|
|
|
31,297
|
|
|
|
33,699
|
|
|
|
27,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
39,736
|
|
|
|
40,593
|
|
|
|
39,938
|
|
|
|
41,578
|
|
|
|
79,076
|
|
Total shareholders equity
|
|
|
176,761
|
|
|
|
178,368
|
|
|
|
177,585
|
|
|
|
183,080
|
|
|
|
125,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders equity
|
|
$
|
216,497
|
|
|
$
|
218,961
|
|
|
$
|
217,523
|
|
|
$
|
224,658
|
|
|
$
|
204,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statements of Operations
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
559
|
|
|
$
|
573
|
|
|
$
|
2,232
|
|
|
$
|
1,775
|
|
|
$
|
3,514
|
|
Expenses
|
|
|
1,914
|
|
|
|
2,220
|
|
|
|
8,413
|
|
|
|
14,904
|
|
|
|
6,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) before earnings (loss) from
subsidiaries
|
|
|
(1,355
|
)
|
|
|
(1,647
|
)
|
|
|
(6,181
|
)
|
|
|
(13,129
|
)
|
|
|
(3,203
|
)
|
(Loss) equity from earnings in
BankAtlantic Bancorp
|
|
|
(477
|
)
|
|
|
1,404
|
|
|
|
5,807
|
|
|
|
9,053
|
|
|
|
11,817
|
|
Equity from earnings (loss) in
Levitt
|
|
|
162
|
|
|
|
(109
|
)
|
|
|
(1,522
|
)
|
|
|
9,125
|
|
|
|
10,265
|
|
Equity from earnings (loss) in
wholly-owned subsidiaries
|
|
|
15
|
|
|
|
(32
|
)
|
|
|
(658
|
)
|
|
|
6,671
|
|
|
|
(35
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes
|
|
|
(1,655
|
)
|
|
|
(384
|
)
|
|
|
(2,554
|
)
|
|
|
11,720
|
|
|
|
18,844
|
|
(Benefit) provision for income taxes
|
|
|
(29
|
)
|
|
|
(294
|
)
|
|
|
(1,857
|
)
|
|
|
4,000
|
|
|
|
6,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing
operations
|
|
|
(1,626
|
)
|
|
|
(90
|
)
|
|
|
(697
|
)
|
|
|
7,720
|
|
|
|
12,018
|
|
Equity (loss) in subsidiaries
discontinued operations, net of tax
|
|
|
1,053
|
|
|
|
(209
|
)
|
|
|
(1,524
|
)
|
|
|
5,054
|
|
|
|
2,212
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
(573
|
)
|
|
|
(299
|
)
|
|
|
(2,221
|
)
|
|
|
12,774
|
|
|
|
14,230
|
|
5% Preferred Stock dividends
|
|
|
(188
|
)
|
|
|
(188
|
)
|
|
|
(750
|
)
|
|
|
(750
|
)
|
|
|
(392
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income allocable to
common stock
|
|
$
|
(761
|
)
|
|
$
|
(487
|
)
|
|
$
|
(2,971
|
)
|
|
$
|
12,024
|
|
|
$
|
13,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statements of Cash Flow
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing
operations
|
|
$
|
(1,626
|
)
|
|
$
|
(90
|
)
|
|
$
|
(697
|
)
|
|
$
|
7,720
|
|
|
$
|
12,018
|
|
Equity (loss) in subsidiaries
discontinued operations, net of tax
|
|
|
1,053
|
|
|
|
(209
|
)
|
|
|
(1,524
|
)
|
|
|
5,054
|
|
|
|
2,212
|
|
Other operating activities
|
|
|
(1,032
|
)
|
|
|
(1,577
|
)
|
|
|
(820
|
)
|
|
|
(12,709
|
)
|
|
|
(18,243
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
operating activities
|
|
|
(1,605
|
)
|
|
$
|
(1,876
|
)
|
|
|
(3,041
|
)
|
|
$
|
65
|
|
|
$
|
(4,013
|
)
|
Net cash used in investing
activities
|
|
|
-
|
|
|
|
(1,000
|
)
|
|
|
(923
|
)
|
|
|
(10,029
|
)
|
|
|
(9,577
|
)
|
Net cash (used in) provided by
financing activities
|
|
|
(300
|
)
|
|
|
(4,343
|
)
|
|
|
(4,904
|
)
|
|
|
35,127
|
|
|
|
13,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase in cash and
cash equivalents
|
|
|
(1,905
|
)
|
|
|
(7,219
|
)
|
|
|
(8,868
|
)
|
|
|
25,163
|
|
|
|
(16
|
)
|
Cash at beginning of period
|
|
|
17,815
|
|
|
|
26,683
|
|
|
|
26,683
|
|
|
|
1,520
|
|
|
|
1,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at end of period
|
|
$
|
15,910
|
|
|
$
|
19,464
|
|
|
$
|
17,815
|
|
|
$
|
26,683
|
|
|
$
|
1,520
|
|
|
|
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10
RISK
FACTORS
You should carefully consider the following risks before
deciding to invest in our Class A Common Stock. Our
business, operating results or financial condition could be
materially and adversely affected by any of these risks. In such
case, the trading price of our Class A Common Stock could
decline, and you may lose all or part of your investment. You
should also refer to the other information included or
incorporated by reference in this prospectus.
Risks
Associated With the Company
We
depend on dividends from BankAtlantic Bancorp for a significant
portion of our cash flow. Regulatory restrictions and the terms
of indebtedness limit the ability for BankAtlantic Bancorp to
pay dividends.
At March 31, 2007, we held approximately 22.1% of the
outstanding common stock of BankAtlantic Bancorp. Dividends by
BankAtlantic Bancorp are subject to a number of conditions,
including the cash flow and profitability of BankAtlantic
Bancorp, declaration of dividends by BankAtlantic Bancorps
board of directors, compliance with the terms of outstanding
indebtedness, and regulatory restrictions applicable to
BankAtlantic.
BankAtlantic Bancorp is a separate publicly traded company whose
board of directors includes a majority of independent directors
as required by the listing standards of the New York Stock
Exchange. Decisions made by the BankAtlantic Bancorps
board of directors are not within our control and may not be
made in our best interests.
BankAtlantic Bancorp is a holding company and it depends upon
dividends from BankAtlantic for a significant portion of its
cash flow. BankAtlantic Bancorp uses dividends from BankAtlantic
to service its debt obligations and to pay dividends on its
capital stock. BankAtlantic Bancorps ability to service
its debt and pay dividends is further subject to restrictions
under its indentures and loan covenants. BankAtlantics
ability to pay dividends or make other capital distributions to
BankAtlantic Bancorp is subject to the regulatory authority of
the OTS and the FDIC. BankAtlantics ability to make
capital distributions is subject to regulatory limitations.
Generally, BankAtlantic may make a capital distribution without
prior OTS approval in an amount equal to BankAtlantics net
income for the current calendar year to date, plus retained net
income for the previous two years, provided that BankAtlantic
does not become under-capitalized as a result of the
distribution. BankAtlantics ability to make such
distributions depends on maintaining eligibility for
expedited treatment. BankAtlantic currently
qualifies for expedited treatment, but there can be no assurance
that it will maintain its current status.
Additionally, although no prior OTS approval may be necessary,
BankAtlantic is required to give the OTS thirty (30) days
notice before making any capital distribution to BankAtlantic
Bancorp. The OTS may object to any capital distribution if it
believes the distribution will be unsafe and unsound. Additional
capital distributions above the limit for an expedited treatment
institution are possible but require the prior approval of the
OTS. The OTS is not likely to approve any distribution that
would cause BankAtlantic to fail to meet its capital
requirements on a pro forma basis after giving effect to the
proposed distribution. The FDIC has backup authority to take
enforcement action if it believes that a capital distribution by
BankAtlantic constitutes an unsafe or unsound action or
practice, even if the OTS has cleared the distribution.
At March 31, 2007, BankAtlantic Bancorp had approximately
$263.3 million of indebtedness outstanding at the holding
company level with maturities in 2032 and 2033. The aggregate
annual interest expense on this indebtedness is approximately
$21.1 million. During 2006, BankAtlantic Bancorp received
$20 million of dividends from BankAtlantic. BankAtlantic
Bancorps financial condition and results would be
adversely affected if the amounts needed to satisfy its debt
obligations, including any additional indebtedness incurred in
the future, exceeded the amount of dividends it receives from
its subsidiaries.
During 2006, we received $2.1 million in dividends from
BankAtlantic Bancorp.
We
also depend on dividends from Levitt for a portion of our cash
flow. Regulatory restrictions and the terms of indebtedness
limit the ability for Levitt to pay dividends.
We also depend on dividends from Levitt for a portion of our
cash flow. Levitt commenced paying a quarterly dividend in
August 2004. Future dividends are subject to Levitts
results and dividends from its subsidiaries and declaration by
Levitts board of directors. Levitt may also be limited
contractually from paying
11
dividends by the terms of its outstanding indebtedness.
Levitts subsidiaries currently have outstanding
indebtedness, and may in the future incur additional
indebtedness, the terms of which limit the payment of dividends
by the subsidiaries to Levitt.
During 2006, we received $264,000 in dividends from Levitt.
We
have in the past incurred operating cash flow deficits that we
expect will continue in the future.
BFC itself has no revenue generating operating activities and is
a holding company engaged in making investments in operating
businesses. Accordingly, we have in the past incurred operating
cash flow deficits at the BFC parent company level and expect to
continue to do so in the foreseeable future. We incurred
operating cash flow deficits of $3.0 million during the
year ended December 31, 2006. We have financed these
operating cash flow deficits with the proceeds of equity or debt
financings. At December 31, 2006, BFCs cash and cash
equivalents balance was approximately $17.8 million. Since
our acquisition strategy involves primarily long-term
investments in growth-oriented businesses, the investments made
are not likely to generate cash flow to BFC in the near term. As
a result, if cash flow from our subsidiaries is not sufficient
to fund parent company operating expenses in the future, we may
be forced to reduce operating expenses, to liquidate some of our
investments or to seek to fund the expenses from the proceeds of
additional equity or debt financing. There is no assurance that
any such financing would be available on commercially reasonable
terms, if at all, or that we would not be forced to liquidate
our investments at depressed prices.
Events
in Florida, where our investments are currently concentrated,
could adversely impact our results and future
growth.
BankAtlantics business, the location of its branches and
the real estate collateralizing its commercial real estate loans
are concentrated in Florida. Further, Levitt develops and sells
its properties primarily in Florida. Further, the State of
Florida is subject to the risks of natural disasters, such as
tropical storms and hurricanes. The occurrence of an economic
downturn in Florida, adverse changes in laws or regulations in
Florida or natural disasters could impact the credit quality of
BankAtlantics assets, the desirability of Levitts
properties, the financial wherewithal of Levitts and
BankAtlantics customers and the overall success of Levitt
and BankAtlantic.
Our
activities and our subsidiaries activities are subject to
a wide range of bank regulatory requirements that could have a
material adverse effect on our business.
The Company and BankAtlantic Bancorp are each grandfathered
unitary savings and loan holding companies and have broad
authority to engage in various types of business activities. The
OTS can stop either of us from engaging in activities or limit
those activities if it determines that there is reasonable cause
to believe that the continuation of any particular activity
constitutes a serious risk to the financial safety, soundness,
or stability of BankAtlantic. The OTS may also:
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limit the payment of dividends by BankAtlantic to BankAtlantic
Bancorp;
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limit transactions between us, BankAtlantic, BankAtlantic
Bancorp and the subsidiaries or affiliates of either;
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limit the activities of BankAtlantic, BankAtlantic Bancorp or
us; or
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impose capital requirements on the Company or BankAtlantic
Bancorp.
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Unlike bank holding companies, as a unitary savings and loan
holding company, the Company and BankAtlantic Bancorp are not
subject to capital requirements. However, the OTS has indicated
that it may in the future impose capital requirements on savings
and loan holding companies. The OTS may in the future adopt
regulations that would affect our operations or those of
BankAtlantic Bancorp, including our and BankAtlantic
Bancorps ability to pay dividends or to engage in certain
transactions or activities.
We
have many competitors who may have greater financial resources
or operate under fewer regulatory constraints.
BFC will face competition in identifying and completing
investments, including from strategic buyers, business
development companies, private equity funds and other financial
sponsors. Many of these competitors have substantially greater
financial resources than us. This competition may make
acquisitions more costly and
12
may make it more difficult for us to identify attractive
investments and successfully complete any desired transaction.
Our
success depends on key management, the loss of which could
disrupt our business operations.
Our future success depends largely upon the continued efforts
and abilities of key management employees, including
Alan B. Levan, our Chairman and Chief Executive Officer,
John E. Abdo, our Vice Chairman and Phil Bakes, our
Managing Director and Executive Vice President. The loss of the
services of one or more of our key employees or our failure to
attract, retain and motivate qualified personnel could have a
material adverse effect on our business, financial condition and
results of operations. Effective March 29, 2007, Glen R.
Gilbert retired from his positions as Executive Vice President
and Chief Financial and Accounting Officer of the Company after
27 years of service. Mr. Gilbert continues to serve the
Company in a non-executive position.
Certain
members of our board of directors and certain of our executive
officers are also directors and executive officers of our
affiliates.
Alan B. Levan, our Chairman and Chief Executive Officer,
and John E. Abdo, our Vice Chairman, are also members of
the board of directors and/or executive officers of BankAtlantic
Bancorp, BankAtlantic, Levitt and Bluegreen. Neither
Mr. Levan nor Mr. Abdo is obligated to allocate a
specific amount of time to the management of the Company, and
they may devote more time and attention to the operations of our
affiliates than they devote directly to our operations.
Additionally, D. Keith Cobb, a member of our board of
directors is a member of the board of directors of BankAtlantic
Bancorp and BankAtlantic.
Our
future acquisitions may reduce our earnings, require us to
obtain additional financing and expose us to additional
risks.
Our business strategy includes investing in and acquiring
diverse operating companies and some of these investments and
acquisitions may be material. While we will seek investments and
acquisitions primarily in companies that provide opportunities
for growth with seasoned and experienced management teams, we
may not be successful in identifying these opportunities.
Further, investments or acquisitions that we do complete may not
prove to be successful. Acquisitions may expose us to additional
risks and may have a material adverse effect on our results of
operations. Any acquisitions we make may:
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fail to accomplish our strategic objectives;
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not perform as expected; and/or
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expose us to the risks of the business that we acquire.
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In addition, we will likely face competition in making
investments or acquisitions which could increase the costs
associated with the investment or acquisition. Our investments
or acquisitions could initially reduce our per share earnings
and add significant amortization expense or intangible asset
charges. Since our acquisition strategy involves holding
investments for the foreseeable future and because we do not
expect to generate significant excess cash flow from operations,
we may rely on additional debt or equity financing to implement
our acquisition strategy. The issuance of debt will result in
additional leverage which could limit our operating flexibility,
and the issuance of equity could result in additional dilution
to our then-current shareholders. In addition, such financing
could consist of equity securities which have rights,
preferences or privileges senior to our Class A Common
Stock. If we do require additional financing in the future, we
cannot assure the reader that it will be available on favorable
terms, if at all. If we fail to obtain the required financing,
we would be required to curtail or delay our acquisition plans
or to liquidate certain of our assets. Additionally, we do not
intend to seek shareholder approval of any investments or
acquisitions unless required by law or regulation.
Recent
changes in accounting standards regarding the treatment of stock
options could harm our ability to attract and retain employees
and negatively impact our results of operations.
In 2006, the Companys net impact of adopting Statement of
Financial Accounting Standards (SFAS) No. 123R
Share-Based Payment (SFAS 123R) on
the amount recognized in non-cash compensation expense was
approximately $7.8 million and approximately
$1.2 million, net of noncontrolling interests and income
taxes, in the Companys consolidated statement of
operations for the year ended December 31, 2006. If the
Company had been required to expense stock option grants during
2005 by applying the measurement provisions of
13
SFAS 123R our recorded net income available to common
shareholders for the year ended December 31, 2005 of
approximately $12.0 million would have been reduced to
approximately $10.9 million. Stock options have
historically been an important employee recruitment and
retention tool, and BFC, BankAtlantic Bancorp and Levitts
ability to attract and retain key personnel may be impacted if
the scope of employee stock option programs is significantly
reduced. In any event, if we continue to grant stock options,
our future results of operations will be negatively impacted due
to SFAS 123R.
Failure
to achieve and maintain effective internal controls in
accordance with Section 404 of the Sarbanes-Oxley Act could
have a material adverse effect on our business and stock
price.
We are required to document and test our internal control
procedures in order to satisfy the requirements of
Section 404 of the Sarbanes-Oxley Act of 2002. This Act
requires annual management assessments of the effectiveness of
our internal control over financial reporting and a report by
our independent auditors addressing these assessments. While
management was able to certify in connection with the
Companys audited financial statements for the year ended
December 31, 2006 that our internal controls over financial
reporting were effective and the Companys auditors issued
their attestation of such report, we cannot assure the reader
that we will maintain the adequacy of our internal controls. If
we fail to maintain the adequacy of our internal controls, we
may not be able to ensure that we can conclude on an ongoing
basis that we have effective internal control over financial
reporting in accordance with Section 404 of the
Sarbanes-Oxley Act. Absolute assurance also cannot be provided
that testing will reveal all material weaknesses or significant
deficiencies in internal control over financial reporting. In
addition, since BankAtlantic Bancorp and Levitt are entities
consolidated in our financial statements, our ability to satisfy
the requirements of Section 404 of the Sarbanes-Oxley Act
will be dependent, in part, on the ability of each of
BankAtlantic Bancorp and Levitt to satisfy those requirements.
Further, we may acquire privately-held businesses that are not
then subject to the same stringent requirements for internal
controls as public companies. While we intend to address any
material weaknesses at acquired consolidated companies, there is
no assurance that this will be accomplished. If we fail to
strengthen the effectiveness of acquired companies
internal controls, we may not be able to conclude on an ongoing
basis that we have effective internal controls over financial
reporting in accordance with Section 404 of the
Sarbanes-Oxley Act. Failure to achieve and maintain an effective
internal control environment could have a material adverse
effect on our stock price.
Our
portfolio of equity securities subjects us to equity pricing
risks.
We maintain a portfolio of publicly traded and privately held
equity securities that subject us to equity pricing risks
arising in connection with changes in the relative values due to
changing market and economic conditions. Volatility or a decline
in the financial markets can negatively impact our net income as
a result of devaluation of these investments. At March 31,
2007 we had equity securities available for sale with a book
value of approximately $2.3 million, as well as our
investment in Benihana Series B Convertible Preferred Stock
for which no market is available. If the Company were to convert
its investment in Benihana, it would represent
1,052,632 shares of Benihana Class A Common Stock. At
March 31, 2007, the aggregate market value of such shares
would have been $29.7 million.
Our
control position may adversely affect the market price of
BankAtlantic Bancorps and Levitts Class A
Common Stock.
As of March 31, 2007, we owned all of BankAtlantic
Bancorps issued and outstanding Class B Common Stock
and 8,329,236 shares, or approximately 15.2%, of
BankAtlantic Bancorps issued and outstanding Class A
Common Stock, and we owned all of Levitts issued and
outstanding Class B Common Stock and 2,074,243 shares,
or approximately 11.1%, of Levitts issued and outstanding
Class A Common Stock. Our share holdings in BankAtlantic
Bancorp represent approximately 55.0% of its total voting power,
and our share holdings in Levitt represent approximately 52.9%
of its total voting power. Since the Class A Common Stock
and Class B Common Stock of each of BankAtlantic Bancorp
and Levitt vote as a single group on most matters, we are in a
position to control BankAtlantic Bancorp and Levitt and elect
BankAtlantic Bancorps and Levitts boards of
directors. As a consequence, we have the voting power to
significantly influence the outcome of any shareholder vote of
BankAtlantic Bancorp and Levitt, except in those limited
circumstances where Florida law mandates that the holders of
each such companys Class A Common Stock vote as a
separate class. As indicated elsewhere in this document, we have
entered into a merger agreement with Levitt which, if the merger
contemplated thereby is consummated, would result in Levitt
becoming a wholly-owned subsidiary of the
14
Company. Completion of the merger is subject to, among other
things, the approval of the holders of a majority of the
outstanding shares of Levitts Class A Common Stock as
well as a separate vote of holders of Levitts Class A
Common Stock other than BFC and certain other shareholders of
Levitt. Our control position may have an adverse effect on the
market prices of BankAtlantic Bancorps and Levitts
Class A Common Stock.
Risks
Associated with the Merger with Levitt
If the
merger with Levitt is consummated, our shareholders will
increase their exposure to the homebuilding industry, which
continues to experience significant weakness.
If the merger with Levitt is consummated, we will significantly
increase our exposure to the risks and uncertainties of the
homebuilding industry. As of March 31, 2007, our investment
in Levitt represented 27% of our parent company total assets. If
the merger is consummated, our investment in Levitt will
represent 64% of our parent company total assets. The
homebuilding industry in general has recently experienced and
continues to experience significant weakness. Adverse economic
and other business conditions have had, and are expected to
continue to have, a negative impact on the homebuilding industry
in general. Homebuilders, including Levitt, have recently
experienced declines in sale orders and increased cancellations
of sale contracts and there is an increased inventory of new and
used homes for sale. Prospective homebuyers are concerned about
home prices and rising interest rates and there is a decline in
homebuyer consumer confidence. Homebuilders have used increased
sales incentives and advertising expenditures and paid higher
broker commissions in an attempt to address the slowdown in the
housing market, which has further negatively affected margins in
the industry. These economic and other business conditions are
expected to continue for the foreseeable future, and no
assurance can be given as to the timing of any recovery in the
homebuilding industry. For the year ended December 31, 2006
and the three months ended March 31, 2007, Levitt had net
loss of $9,164,000 and net income of $976,000, respectively. See
also Risks Associated with Our Class A Common Stock
and this Offering Even if the merger with Levitt is
not consummated, we may use the net proceeds of this offering to
increase our investment in Levitt.
If a
significant number of holders of Levitt Class A Common
Stock exercise their appraisal rights, it could have an adverse
effect on us.
If a significant number of holders of Levitt Class A Common
Stock exercise their appraisal rights, we may elect not to
consummate the merger with Levitt, in which case we will have
incurred significant transaction costs without consummating the
transaction. Even if the merger is consummated, the number of
shareholders exercising appraisal rights will impact our cash
balances and cash flow, as we will be required to pay dissenting
shareholders in cash. We have no operations other than
activities relating to identifying, analyzing and in appropriate
cases, acquiring new investments, as well as the monitoring and
managing of our existing investments. Since we are dependent
upon dividends from our subsidiaries for a significant portion
of our cash flow, and since the declaration of dividends by our
subsidiaries is not always within our control, any significant
decrease in our cash position as a result of payments to
dissenting shareholders could have a material adverse effect on
our business.
Substantial
sales of our Class A Common Stock could adversely affect
its market price.
In connection with the merger with Levitt, it is anticipated
that approximately 37,533,953 shares of our Class A
Common Stock will be issued to holders of Levitt Class A
Common Stock and approximately 4,300,000 additional shares of
our Class A Common Stock will be issuable pursuant to
options to purchase shares of Levitt Class A Common Stock
outstanding as of March 31, 2007. These shares will
represent approximately 52% of the total number of shares of our
Class A Common Stock anticipated to be outstanding if the
merger with Levitt is completed, including the
10,000,000 shares to be issued in this offering. Other than
the shares issued or to be issued to affiliates of Levitt or the
Company, which would represent approximately 28% of the total
number of shares of our Class A Common Stock anticipated to
be outstanding if the merger with Levitt is completed, including
the 10,000,000 shares to be issued in this offering, the shares
issued or to be issued in connection with the merger with Levitt
will not be subject to restrictions on resale. The issuance of
and potential resale of these new shares could have the effect
of depressing the market price of our Class A Common Stock.
15
If the
merger with Levitt is not consummated, we will have incurred
substantial costs adversely impacting our results of operations
and financial condition and the market price of our common
stock.
We have incurred and will continue to incur substantial costs in
connection with the merger with Levitt. These costs are
primarily associated with the fees of our attorneys, accountants
and financial advisors. In addition, we have diverted
significant management resources in an effort to consummate the
merger and each are subject to restrictions contained in the
merger agreement on the conduct of our business prior to the
effective time of the merger. If the merger is not consummated,
we will have incurred significant costs, including the diversion
of management resources, from which we will have received little
or no benefit.
Risks
Associated with the Banking Industry and Our Investment in
BankAtlantic Bancorp
Changes
in interest rates could adversely affect BankAtlantic
Bancorps net interest income and
profitability.
The majority of BankAtlantics assets and liabilities are
monetary in nature. As a result, the earnings and growth of
BankAtlantic are significantly affected by interest rates, which
are subject to the influence of economic conditions generally,
both domestic and foreign, and also to the monetary and fiscal
policies of the United States and its agencies, particularly the
Federal Reserve Board. The nature and timing of any changes in
such policies or general economic conditions and their effect on
BankAtlantic cannot be controlled and are extremely difficult to
predict. Changes in interest rates can impact
BankAtlantics net interest income as well as the valuation
of its assets and liabilities.
Banking is an industry that depends to a large extent on its net
interest income. Net interest income is the difference between:
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interest income on interest-earning assets, such as
loans; and
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interest expense on interest-bearing liabilities, such as
deposits.
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Changes in interest rates can have differing effects on
BankAtlantics net interest income and the cost of
purchasing residential mortgage loans in the secondary market.
In particular, changes in market interest rates, changes in the
relationships between short-term and long-term market interest
rates, or the yield curve, or changes in the relationships
between different interest rate indices can affect the interest
rates charged on interest-earning assets differently than the
interest rates paid on interest-bearing liabilities. This
difference could result in an increase in interest expense
relative to interest income and therefore reduce
BankAtlantics net interest income. While BankAtlantic has
attempted to structure its asset and liability management
strategies to mitigate the impact on net interest income of
changes in market interest rates, there can be no assurance that
BankAtlantic will be successful in doing so.
Loan prepayment decisions are also affected by interest rates.
Loan prepayments generally accelerate as interest rates fall.
Prepayments in a declining interest rate environment reduce
BankAtlantics net interest income and adversely affect its
earnings because:
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it amortizes premiums on acquired loans, and if loans are
prepaid, the unamortized premium will be charged off; and
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the yields it earns on the investment of funds that it receives
from prepaid loans are generally less than the yields that it
earned on the prepaid loans.
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Significant loan prepayments in BankAtlantics mortgage
portfolio in the future could have an adverse effect on
BankAtlantics earnings. Additionally, increased
prepayments associated with purchased residential loans may
result in increased amortization of premiums on acquired loans,
which would reduce BankAtlantics interest income.
In a rising interest rate environment loan prepayments generally
decline resulting in loan yields that are less than the current
market yields. In addition, the credit risks of loans with
adjustable rate mortgages may worsen as interest rates rise and
debt service obligations increase.
BankAtlantic has developed a computer model using standard
industry software to quantify its interest rate risk, referred
to as an ALCO model in support of its
Asset/Liability Committee. This model measures the potential
impact of gradual and abrupt changes in interest rates on
BankAtlantics net interest income. While
16
management would attempt to respond to the projected impact on
net interest income, there is no assurance that
managements efforts will be successful.
The current level of short term interest rates is approximately
equal to longer term rates. This is referred to as a flat
yield curve. This situation has existed for some time
extending back to 2005. BankAtlantics net interest income
is largely derived from a combination of two factors: the level
of core deposits, such as demand savings and NOW deposits, and
the ability of banks to raise short term deposits and other
borrowings and invest them at longer maturities. The current
flat yield curve has significantly impacted the ability of
BankAtlantic to profitably raise short term funds for longer
term investment as the interest rate spread between short term
and long term maturities is negligible. The future pattern of
interest rates, including the relationship between short term
and long term rates, will determine BankAtlantics ability
to improve net interest income.
BankAtlantics
Floridas Most Convenient Bank initiative has
resulted in higher operating expenses, which has had an adverse
impact on BankAtlantic Bancorps earnings.
BankAtlantics Floridas Most Convenient
Bank initiative and its associated expanded operations
have required it to provide additional management resources,
hire additional personnel, increase compensation, occupancy and
marketing expenditures and take steps to enhance and expand its
operational and management information systems. Employee
compensation, occupancy and advertising expenses have
significantly increased since the inception, during 2002, of the
initiative from $78.9 million during 2001 to
$182.0 million during 2005 and $238.0 million during
2006. Additionally, BankAtlantic has renovated the interior of
most of its existing stores and has committed to a program to
expand its store network. As of March 31, 2007, BankAtlantic had
opened 22 new stores since January 2005, and BankAtlantic
anticipates accelerating the pace of store openings in future
periods.
As a result of these growth initiatives, BankAtlantic has
incurred and will continue to incur increased operating
expenses, which occur in advance of any anticipated benefit
resulting from these expenses. In the event that the
Floridas Most Convenient Bank initiative does
not produce the results anticipated, BankAtlantics
increased operating expenses will not be adequately offset by
the benefits of the initiative and BankAtlantic Bancorps
earnings will continue to be adversely impacted. Additionally,
if BankAtlantic Bancorps growth initiatives do not produce
results which justify these increases in operating expenses, it
may be forced to reduce expenses which could result in
additional charges and costs.
Further, while its management is currently undertaking a review
of all non-interest expenses, including marketing expenses which
increased significantly in 2006 with a view of reducing expenses
not directly associated with new stores or customer service,
there is no assurance that BankAtlantic will be successful in
its efforts to reduce expenses.
BankAtlantics
loan portfolio is concentrated in real estate
lending.
The national real estate market is showing signs of a slow down,
particularly in areas that have seen significant growth,
including Florida and California. BankAtlantics loan
portfolio is concentrated in commercial real estate loans
(virtually all of which are located in Florida), residential
mortgages (nationwide), and consumer home-equity loans
(Florida). BankAtlantic has exposure to credit losses that may
arise from this concentration in what many believe is a
softening real estate sector. BankAtlantic had a total
commercial real estate acquisition and development loan
portfolio of approximately $562 million at March 31, 2007.
Included in the commercial real estate loans at March 31,
2007 are approximately $140 million of builder land
loans, which are land loans to borrowers who have option
agreements with regional and/or national builders and which are
susceptible to extended maturities or borrower default due to a
slow-down in Florida construction activity.
BankAtlantic
obtains a significant portion of its non-interest income through
service charges on core deposit accounts.
BankAtlantics core deposit account growth has generated a
substantial amount of service charge income. The largest
component of this service charge income is overdraft fees.
Changes in customer behavior as well as increased competition
from other financial institutions could result in declines in
core deposit accounts or in overdraft frequency resulting in a
decline in service charge income. Additionally, any future
changes in banking regulations may impact this revenue source.
Any of such changes could have a material adverse effect on
BankAtlantics results.
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BankAtlantics
loan portfolio subjects it to high levels of credit
risk.
BankAtlantic is exposed to the risk that its borrowers or
counter-parties may default on their obligations. Credit risk
arises through the extension of loans, certain securities,
letters of credit, and financial guarantees and through
counter-party exposure on trading and wholesale loan
transactions. In an attempt to manage this risk, BankAtlantic
establishes policies and procedures to manage both on and
off-balance sheet (primarily loan commitments) credit risk.
BankAtlantic attempts to manage credit exposure to individual
borrowers and counter-parties on an aggregate basis including
loans, securities, letters of credit, derivatives and unfunded
commitments. Credit personnel analyze the creditworthiness of
individual borrowers or counter-parties, and limits are
established for the total credit exposure to any one borrower or
counter-party. Credit limits are subject to varying levels of
approval by senior line and credit risk managers. BankAtlantic
also enters into participation agreements with other lenders to
limit its credit risk.
The majority of BankAtlantics loan portfolio consists of
loans secured by real estate. BankAtlantics loan portfolio
included $2.2 billion of loans secured by residential real
estate and $1.8 billion of commercial real estate,
construction and development loans at March 31, 2007. At
March 31, 2007, BankAtlantics commercial real estate,
construction and development loans, which are concentrated
mainly in Florida, represented approximately 40.0% of its loan
portfolio. The real estate market in Florida is currently
exhibiting signs of weakness. If real estate values in Florida
were to decline, the credit quality of BankAtlantics loan
portfolio and its earnings could be adversely impacted. Real
estate values are affected by various factors, including changes
in general
and/or
regional economic conditions, governmental rules and policies
and natural disasters such as hurricanes.
BankAtlantics commercial real estate loan portfolio
includes large lending relationships, including relationships
with unaffiliated borrowers involving lending commitments in
each case in excess of $30 million. These relationships
represented an aggregate outstanding balance of
$532 million as of December 31, 2006. Defaults by any
of these borrowers could have a material adverse effect on
BankAtlantics results.
BankAtlantics
interest-only residential loans expose it to greater credit
risks.
A portion of BankAtlantics residential loan portfolio
consists of interest-only loans. These loans have reduced
initial loan payments with the potential for significant
increases in monthly loan payments in subsequent periods, even
if interest rates do not rise, as required amortization of the
principal amount commences. Monthly loan payments will also
increase as interest rates increase. This presents a potential
repayment risk if the borrower is unable to meet the higher debt
service obligations or refinance the loan. It is anticipated
that it will be difficult for borrowers to refinance residential
loans in markets where real estate values have declined.
An
inadequate allowance for loan losses would result in reduced
earnings.
As a lender, BankAtlantic is exposed to the risk that its
customers will be unable to repay their loans according to their
terms and that any collateral securing the payment of their
loans will not be sufficient to assure full repayment.
BankAtlantic evaluates the collectibility of its loan portfolio
and provides an allowance for loan losses that it believes is
adequate based upon such factors as:
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the risk characteristics of various classifications of loans;
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previous loan loss experience;
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specific loans that have loss potential;
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delinquency trends;
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estimated fair value of the collateral;
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current economic conditions;
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the views of its regulators; and
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geographic and industry loan concentrations.
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If BankAtlantics evaluation is incorrect and borrower
defaults cause losses exceeding the portion of the allowance for
loan losses allocated to those loans, BankAtlantic
Bancorps earnings could be significantly and adversely
affected. BankAtlantic may experience losses in its loan
portfolios or perceive adverse trends that require it to
significantly increase its allowance for loan losses in the
future, which would reduce future earnings.
18
In addition, BankAtlantics regulators may require it to
increase or decrease its allowance for loan losses even if
BankAtlantic thinks such change is unjustified.
Adverse
events in Florida, where BankAtlantics business is
currently concentrated, could adversely impact
BankAtlantics results and future growth.
BankAtlantics business, the location of its stores and the
real estate collateralizing its commercial real estate loans are
primarily concentrated in Florida. As a result, BankAtlantic
Bancorp is exposed to geographic risks, and any economic
downturn in Florida or adverse changes in laws and regulations
in Florida would have a negative impact on its revenues and
business. Further, the State of Florida is subject to the risks
of natural disasters such as tropical storms and hurricanes. The
occurrence of an economic downturn in Florida, adverse changes
in laws or regulations in Florida or natural disasters could
impact the credit quality of BankAtlantics assets, growth,
the level of deposits BankAtlantics customers maintain,
the success of BankAtlantics customers business
activities, and the ability of BankAtlantic to expand its
business.
Regulatory
Compliance.
The banking industry is an industry subject to multiple layers
of regulation. A risk of doing business in the banking industry
is that a failure to comply with any of these regulations can
result in substantial penalties, significant restrictions on
business activities and growth plans
and/or
limitations on dividend payments, depending upon the type of
violation and various other factors. As a holding company,
BankAtlantic Bancorp is also subject to significant regulation.
BankAtlantic
has entered into a deferred prosecution agreement with the
Department of Justice and a Cease and Desist Order with the OTS
regarding its compliance with the USA PATRIOT Act, anti-money
laundering laws and the Bank Secrecy Act.
In April 2006, BankAtlantic entered into a deferred prosecution
agreement with the U.S. Department of Justice relating to
past deficiencies in BankAtlantics compliance with the
Bank Secrecy Act and anti-money laundering laws. Under the
Department of Justice agreement, BankAtlantic agreed to the
filing of one-count information charging it with failing to
establish an adequate anti-money laundering compliance program
in accordance with the Bank Secrecy Act. BankAtlantic
simultaneously entered into a cease and desist order with the
OTS and a consent agreement with the Financial Crimes
Enforcement Network (FinCEN) relating to deficiencies in its
compliance with the Bank Secrecy Act. The Department of Justice
has agreed to take no further action against BankAtlantic in
connection with this matter, the court will dismiss the
information, and the deferred prosecution agreement will expire
if BankAtlantic complies with the obligations under the deferred
prosecution agreement for a period of twelve months. While
BankAtlantic believes that it has appropriate policies and
procedures in place to maintain full compliance with the terms
of the Department of Justice agreement and the OTS order,
compliance with the Bank Secrecy Act is inherently difficult and
there is no assurance that BankAtlantic will remain in full
compliance with the Bank Secrecy Act or the terms of the
Department of Justice agreement or the OTS order. If the federal
agencies deem BankAtlantic not in compliance with its
obligations under the deferred prosecution agreement or the
cease and desist order BankAtlantic may not be able to obtain
regulatory approvals necessary to proceed with certain aspects
of its business plan, including its store expansion and other
acquisition plans, and its ability to pay dividends, could be
adversely affected by a cease and desist order or any other
actions taken by regulators or other federal agencies.
BankAtlantic
Bancorps portfolio of equity securities subjects it to
equity pricing risks.
BankAtlantic Bancorp maintains a portfolio of publicly traded
and privately held equity securities that subject it to equity
pricing risks arising in connection with changes in the relative
values due to changing market and economic conditions.
Volatility or a decline in the financial markets can negatively
impact BankAtlantic Bancorps net income as a result of
devaluation of these investments. At March 31, 2007,
BankAtlantic Bancorp had equity securities with a book value of
approximately $91 million. Additionally, in connection with
the merger of Ryan Beck with Stifel in February 2007,
BankAtlantic Bancorp received approximately
2,377,000 shares of Stifel common stock with a market value
at March 31, 2007 of $103.7 million and anticipates
receiving warrants to acquire approximately 481,700 shares
of Stifel common stock upon Stifel shareholder approval. Stifel
had approximately 12,400,000 shares of common stock
outstanding at the acquisition date, excluding the shares of
common stock issued to BankAtlantic Bancorp at the closing of
the Ryan Beck acquisition. In addition to
19
limitations imposed by federal securities laws, BankAtlantic
Bancorp is subject to contractual restrictions which limit the
number of shares of Stifel common stock that it is permitted to
sell during the two-year period following the merger. Even after
these restrictions lapse, the trading market for Stifel common
stock may not be liquid enough to permit BankAtlantic Bancorp to
sell Stifel common stock that it owns without significantly
reducing the market price of these shares, if BankAtlantic
Bancorp is able to sell them at all.
Risks
Associated with the Homebuilding and Real Estate Industry and
Our Investment in Levitt
Levitt
engages in real estate activities which are speculative and
involve a high degree of risk.
The real estate industry is highly cyclical by nature, the
current market is experiencing a significant decline and future
market conditions are uncertain. Factors which adversely affect
the real estate and homebuilding industries, many of which are
beyond Levitts control, include:
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overbuilding or decreases in demand;
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inventory
build-up due
to buyers contract cancellations;
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the availability and cost of financing;
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unfavorable interest rates and increases in inflation;
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changes in the general availability of land and competition for
available land;
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construction defects and warranty claims arising in the ordinary
course of business or otherwise, including mold related property
damage and bodily injury claims and homeowner and
homeowners association lawsuits;
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changes in national, regional and local economic conditions;
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cost overruns, inclement weather, and labor and material
shortages;
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the impact of present or future environmental legislation,
zoning laws and other regulations;
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availability, delays and costs associated with obtaining
permits, approvals or licenses necessary to develop
property, and
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increase in real estate taxes, insurance and other local
government fees.
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Levitt
has experienced a decline in its homebuilding operations over
the past year which has adversely affected its sales volume and
pricing.
In 2006, the homebuilding industry in Levitts markets
experienced a significant decline in demand for new homes. The
trends in the homebuilding industry continue to be unfavorable.
Demand has slowed as evidenced by fewer new orders and lower
conversion rates in the markets in which Levitt operates. These
conditions have been particularly difficult in Florida, which is
the market in which Levitt has the strongest presence. Spec
inventories have increased as a result of higher cancellation
rates on pending contracts as new homeowners sometimes find it
more advantageous to forfeit a deposit than to close on the
purchase of the home. The combination of the lower demand and
higher inventories affects both the number of homes Levitt can
sell and the prices at which Levitt can sell them. Levitt cannot
predict how long demand and other factors in the homebuilding
market will remain unfavorable, how active the market will be
during the coming periods and if sales volume and pricing will
return to past levels or levels that will enable Levitt to
operate more profitably.
The
homebuilding industry is highly competitive.
The homebuilding industry is highly competitive. Levitt competes
in each of its markets with numerous national, regional and
local homebuilders. This competition with other homebuilders
could reduce the number of homes Levitt delivers or cause Levitt
to accept reduced margins in order to maintain sales volume.
Levitt also competes with the resale of existing homes,
including foreclosed home sales by lenders, sales by housing
speculators and available rental housing. As demand for homes
has slowed, the number of completed unsold homes has increased
as well as the supply of existing homes. Competition with
existing inventory, including homes purchased for speculation,
has resulted in increased pressure on the prices at which Levitt
is able to sell homes, as well as upon the number of homes
Levitt can sell.
20
Continued
decline in land values could result in further impairment
write-offs.
Some of the land Levitt currently owns was purchased at prices
that reflected the recent historic high demand cycle in the
homebuilding industry. The recent slowdown in the homebuilding
industry in Levitts markets resulted in $36.8 million
of homebuilding inventory impairments for the year ended
December 31, 2006 and $282,000 of homebuilding inventory
impairments for the quarter ended March 31, 2007. If market
conditions continue to deteriorate, the fair value of some of
these assets or additional assets may decrease and be subject to
future impairment write-offs and adversely affect our financial
condition and operating results. Further, impairment write-offs
could also result in the acceleration of debt which is secured
by impaired assets. In order to remain competitive, Levitt is
aggressively offering sales incentives which will negatively
impact its margins and may impact its backlog.
Because
real estate investments are illiquid, a decline in the real
estate market or in the economy in general could adversely
impact Levitts business and cash flow.
Real estate investments are generally illiquid. Companies that
invest in real estate have a limited ability to vary their
portfolio of real estate investments in response to changes in
economic and other conditions. In addition, the market value of
any or all of Levitts properties or investments may
decrease in the future. Moreover, Levitt may not be able to
timely dispose of an investment when it finds dispositions
advantageous or necessary, or complete the disposition of
properties under contract to be sold, and any such dispositions
may not provide proceeds in excess of the amount of
Levitts investment in the property or even in excess of
the amount of any indebtedness secured by the property. As part
of Levitts strategy for future growth, Levitt
significantly increased its land inventory during 2006, with its
inventory of real estate increasing from $611.3 million at
December 31, 2005 to $844.6 million at March 31,
2007. This substantial increase in Levitts land holdings
and concentration in Florida subjects Levitt to a greater risk
from declines in real estate values in its markets. Further,
these newly acquired properties were purchased at a time when
competition for land was very high, and accordingly these
properties may be more susceptible to impairment write downs in
the current real estate environment. Declines in real estate
values or in the economy generally could have a material adverse
impact on Levitts financial condition and results of
operations.
Shortages
of supplies and labor could increase costs and delay deliveries,
which may adversely affect Levitts operating
results.
Levitts ability to develop its projects may be affected by
circumstances beyond its control, including:
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shortages or increases in prices of construction materials;
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natural disasters in the areas in which Levitt operates;
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work stoppages, labor disputes and shortages of qualified trades
people, such as carpenters, roofers, electricians and plumbers;
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lack of availability of adequate utility infrastructure and
services; and
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Levitts need to rely on local subcontractors who may not
be adequately capitalized or insured.
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Any of these circumstances could give rise to delays in the
start or completion of, or increase the cost of, developing one
or more of Levitts projects or individual homes. Levitt
competes with other real estate developers, both regionally and
nationally, for labor as well as raw materials, and the
competition for materials has recently become global. Increased
costs or shortages of lumber, drywall, steel, concrete, roofing
materials, pipe and asphalt could cause increases in
construction costs and construction delays.
Historically, Levitt has sought to manage its costs, in part, by
entering into short-term, fixed-price materials contracts with
selected subcontractors and material suppliers. Levitt may be
unable to achieve cost containment in the future by using
fixed-price contracts. Without corresponding increases in the
sales prices of Levitts real estate inventories (both land
and finished homes), increasing materials costs associated with
land development and home building could negatively affect
Levitts margins. Levitt may not be able to recover these
increased costs by raising its home prices because, typically,
the price for each home is set in a home sale contract with the
customer months prior to delivery. If Levitt is unable to
increase its prices for new homes to offset these increased
costs, Levitts operating results could be adversely
affected.
21
Natural
disasters could have an adverse effect on Levitts real
estate operations.
Levitt currently develops and sells a significant portion of its
properties in Florida. The Florida markets in which Levitt
operates are subject to the risks of natural disasters such as
hurricanes and tropical storms. These natural disasters could
have a material adverse effect on Levitts business by
causing the incurrence of uninsured losses, increased homebuyer
insurance rates, delays in construction, and shortages and
increased costs of labor and building materials. In 2005, three
named storms made landfall in the State of Florida causing
little damage to Levitts communities. In addition, during
the 2004 hurricane season, five named storms made landfall in
the State of Florida causing property damage in several of
Levitts communities; however, Levitts losses were
primarily related to landscaping and claims based on water
intrusion associated with the hurricanes, and Levitt has
attempted to address those issues. In May 2005, a purported
class action was brought on behalf of owners of homes in a
particular Central Florida Levitt and Sons subdivision
alleging construction defects and damage suffered during certain
of the hurricanes in 2004.
In addition to property damage, hurricanes may cause disruptions
to Levitts business operations. New homebuyers cannot
obtain insurance until after named storms have passed, creating
delays in new home deliveries. Approaching storms require that
sales, development and construction operations be suspended in
favor of storm preparation activities such as securing
construction materials and equipment. After a storm has passed,
construction-related resources such as
sub-contracted
labor and building materials are likely to be redeployed to
hurricane recovery efforts around the state. Governmental
permitting and inspection activities may similarly be focused
primarily on returning displaced residents to homes damaged by
the storms, rather than on new construction activity. Depending
on the severity of the damage caused by the storms, disruptions
such as these could last for several months.
Levitts
ability to sell lots and homes, and, accordingly, Levitts
operating results, will be affected by the availability of
financing to potential purchasers.
Most purchasers of real estate finance their acquisitions
through third-party mortgage financing. Residential real estate
demand is generally adversely affected by:
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increases in interest rates;
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decreases in the availability of mortgage financing;
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increasing housing costs;
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unemployment; and
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changes in federally sponsored financing programs.
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Increases in interest rates or decreases in the availability of
mortgage financing could depress the market for new homes
because of the increased monthly mortgage costs or the
unavailability of financing to potential homebuyers. Even if
potential customers do not need financing, increases in interest
rates and decreased mortgage availability could make it harder
for them to sell their homes. Recently, increases in rates on
certain adjustable rate mortgage products and a trend of
increasing defaults by borrowers generally, including under
subprime, interest only and negative amortization mortgage
loans, could lead to a reduction in the availability of mortgage
financing. If demand for housing declines, land may remain in
Levitts inventory longer and Levitts corresponding
borrowing costs would increase. This would adversely affect
Levitts operating results and financial condition.
Levitts
ability to successfully develop communities could affect its
financial condition.
It may take several years for a community development to achieve
positive cash flow. Before a community development generates any
revenues, material expenditures are required to acquire land, to
obtain development approvals and to construct significant
portions of project infrastructure, amenities, model homes and
sales facilities. If Levitt is unable to develop and market its
communities successfully and to generate positive cash flows
from these operations in a timely manner, it will have a
material adverse effect on Levitts ability to meet its
working capital requirements.
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A
portion of Levitts revenues from land sales in its master
planned communities are recognized for accounting purposes under
the percentage of completion method, therefore, if Levitts
actual results differ from its assumptions, Levitts
profitability may be reduced.
Under the percentage of completion method for recognizing
revenue, Levitt records revenue as work on the project
progresses. This method relies on estimates of total expected
project costs. Revenue and cost estimates are reviewed and
revised periodically as the work progresses. Adjustments are
reflected in contract revenue in the period when such estimates
are revised. Variation of actual results and Levitts
estimates in these large master planned communities could be
material.
Product
liability litigation and claims that arise in the ordinary
course of business may be costly which could adversely affect
Levitts business.
Levitts homebuilding and commercial development business
is subject to construction defect and product liability claims
arising in the ordinary course of business. These claims are
common in the homebuilding and commercial real estate industries
and can be costly. Levitt has, and many of Levitts
subcontractors have, general liability, property, errors and
omissions, workers compensation and other business insurance.
However, these insurance policies only protect Levitt against a
portion of its risk of loss from claims. In addition, because of
the uncertainties inherent in these matters, Levitt cannot
provide reasonable assurance that its insurance coverage or its
subcontractor arrangements will be adequate to address all
warranty, construction defect and liability claims in the
future. In addition, the costs of insuring against construction
defect and product liability claims, if applicable, are high and
the amount of coverage offered by insurance companies is also
currently limited. There can be no assurance that this coverage
will not be further restricted and become more costly. If Levitt
is not able to obtain adequate insurance against these claims,
Levitt may experience losses that could negatively impact its
operating results. Levitt is currently a defendant in a
purported class action lawsuit alleging construction defects and
seeking damages. While Levitt is vigorously defending this
action, it will be required to incur legal fees and there is no
assurance that Levitt will be successful in litigation.
Further, as a community developer, Levitt may be expected by
community residents from time to time to resolve any real or
perceived issues or disputes that may arise in connection with
the operation or development of its communities. Any efforts
made by Levitt in resolving these issues or disputes may not
satisfy the affected residents and any subsequent action by
these residents could negatively impact sales and results of
operations. In addition, Levitt could be required to make
material expenditures related to the settlement of such issues
or disputes or to modify its community development plans.
Levitt
is subject to governmental regulations that may limit its
operations, increase its expenses or subject it to
liability.
Levitt is subject to laws, ordinances and regulations of various
federal, state and local governmental entities and agencies
concerning, among other things:
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environmental matters, including the presence of hazardous or
toxic substances;
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wetland preservation;
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health and safety;
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zoning, land use and other entitlements;
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building design; and
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density levels.
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In developing a project and building homes or commercial
properties, Levitt may be required to obtain the approval of
numerous governmental authorities regulating matters such as:
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installation of utility services such as gas, electric, water
and waste disposal;
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the dedication of acreage for open space, parks and schools;
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permitted land uses; and
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the construction design, methods and materials used.
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These laws or regulations could, among other things:
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establish building moratoriums;
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limit the number of homes or commercial properties that may be
built;
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change building codes and construction requirements affecting
property under construction;
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increase the cost of development and construction; and
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delay development and construction.
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Levitt may also at times not be in compliance with all
regulatory requirements. If Levitt is not in compliance with
regulatory requirements, it may be subject to penalties or be
forced to incur significant expenses to cure any noncompliance.
In addition, some of Levitts land and some of the land
that Levitt may acquire have not yet received planning approvals
or entitlements necessary for planned or future development.
Failure to obtain entitlements necessary for further development
of this land on a timely basis or to the extent desired may
adversely affect Levitts future results and prospects.
Several governmental authorities have also imposed impact fees
as a means of defraying the cost of providing governmental
services to developing areas, and many of these fees have
increased significantly during recent years.
Building
moratoriums and changes in governmental regulations may subject
Levitt to delays or increased costs of construction or prohibit
development of Levitts properties.
Levitt may be subject to delays or may be precluded from
developing in certain communities because of building
moratoriums or changes in statutes or rules that could be
imposed in the future. The State of Florida and various counties
have in the past and may in the future continue to declare
moratoriums on the issuance of building permits and impose
restrictions in areas where the infrastructure, such as roads,
schools, parks, water and sewage treatment facilities and other
public facilities, does not reach minimum standards.
Additionally, certain counties in Florida, including counties
where Levitt is developing projects, have enacted more stringent
building codes which have resulted in increased costs of
construction. As a consequence, Levitt may incur significant
expenses in connection with complying with new regulatory
requirements that Levitt may not be able to pass on to buyers.
Levitt
is subject to environmental laws and the cost of compliance
could adversely affect its business.
As a current or previous owner or operator of real property,
Levitt may be liable under federal, state, and local
environmental laws, ordinances and regulations for the costs of
removal or remediation of hazardous or toxic substances on,
under or in the property. These laws often impose liability
whether or not Levitt knew of, or was responsible for, the
presence of such hazardous or toxic substances. The cost of
investigating, remediating or removing such hazardous or toxic
substances may be substantial. The presence of any such
substance, or the failure promptly to remediate any such
substance, may adversely affect Levitts ability to sell or
lease the property, to use the property for Levitts
intended purpose, or to borrow using the property as collateral.
Increased
insurance risk could negatively affect Levitts
business.
Insurance and surety companies may take actions that could
negatively affect Levitts business, including increasing
insurance premiums, requiring higher self-insured retentions and
deductibles, requiring additional collateral or covenants on
surety bonds, reducing limits, restricting coverages, imposing
exclusions, and refusing to underwrite certain risks and classes
of business. Any of these actions may adversely affect
Levitts ability to obtain appropriate insurance coverage
at reasonable costs which could have a material adverse effect
on Levitts business.
Levitt
utilizes community development districts to fund development
costs.
Levitt establishes community development districts to access
tax-exempt bond financing to fund infrastructure and other
projects at its master-planned communities. Levitt is
responsible for any assessed amounts until the underlying
property is sold. Levitt will continue to be responsible for the
annual assessments if the property is never sold.
24
Levitts
indebtedness and leverage could adversely affect its financial
condition, restrict its ability to operate and prevent it from
fulfilling its obligations.
Levitt has a significant amount of debt. At March 31, 2007,
Levitts consolidated debt was approximately
$671.8 million. Levitts debt could:
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require Levitt to dedicate a substantial portion of its cash
flow from operations to payment of or on our debt and reduce our
ability to use its cash flow for other purposes;
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be accelerated if Levitt does not meet required covenants or the
collateral securing the indebtedness decreases in value;
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make Levitt more vulnerable in the event of a downturn in its
business or in general economic conditions;
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impact Levitts flexibility in planning for, or reacting
to, the changes in its business;
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limit Levitts ability to obtain future financing for
working capital, capital expenditures, acquisitions, debt
service requirements or other requirements; and
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place Levitt at a competitive disadvantage if it has more debt
than its competitors.
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Levitts ability to meet its debt service and other
obligations, to refinance its indebtedness or to fund planned
capital expenditures will depend upon Levitts future
performance. Levitt is engaged in businesses that are
substantially affected by changes in economic cycles.
Levitts revenues and earnings vary with the level of
general economic activity in the markets it serves. The factors
that affect Levitts ability to generate cash can also
affect its ability to raise additional funds for these purposes
through the sale of equity securities, the refinancing of debt,
or the sale of assets. Changes in prevailing interest rates may
affect Levitts ability to meet its debt service
obligations, because borrowings under a significant portion of
its debt instruments bear interest at floating rates.
Levitts anticipated minimum debt payment obligations in
2007 total approximately $46.0 million, which does not
include repayments of specified amounts upon a sale of portions
of the property securing the debt or any amounts that could be
accelerated in the event that property serving as collateral
becomes impaired. Levitts business may not generate
sufficient cash flow from operations, and future borrowings may
not be available under Levitts existing credit facilities
or any other financing sources in an amount sufficient to enable
Levitt to service its indebtedness, or to fund its other
liquidity needs. Levitt may need to refinance all or a portion
of its debt on or before maturity, which it may not be able to
do on favorable terms or at all.
Levitts outstanding debt instruments and bank credit
facilities impose restrictions on its operations and activities.
The most significant restrictions relate to debt incurrence,
lien incurrence, sales of assets and cash distributions by
Levitt and require Levitt to comply with certain financial
covenants. If Levitt fails to comply with any of these
restrictions or covenants, the holders of the applicable debt
could cause Levitts debt to become due and payable prior
to maturity. In addition, some of Levitts debt instruments
contain cross-default provisions, which could cause a default in
a number of debt instruments if Levitt defaults on only one debt
instrument.
Levitts
current land development plans may require additional capital,
which may not be available.
Levitt anticipates that it will need to obtain additional
financing as it funds its current land development projects.
These funds may be obtained through public or private debt or
equity financings, additional bank borrowings or from strategic
alliances. Levitt may not be successful in obtaining additional
funds in a timely manner, on favorable terms or at all.
Moreover, certain of Levitts bank financing agreements
contain provisions that limit the type and amount of debt Levitt
may incur in the future without its lenders consent. In
addition, the availability of borrowed funds, especially for
land acquisition and construction financing, may be greatly
reduced, and lenders may require increased amounts of equity to
be invested in a project by borrowers in connection with both
new loans and the extension of existing loans. If Levitt does
not have access to additional capital, it may be required to
delay, scale back or abandon some or all of its land development
activities or reduce capital expenditures and the size of its
operations.
25
Levitts
results may vary.
Levitt has historically experienced, and expects to continue to
experience, variability in operating results on a quarterly
basis and from year to year. Factors expected to contribute to
this variability include:
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the cyclical nature of the real estate and construction
industries;
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prevailing interest rates and the availability of mortgage
financing;
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the uncertain timing of closings;
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weather and the cost and availability of materials and labor;
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competitive variables; and
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|
the timing of receipt of regulatory and other governmental
approvals for construction of projects.
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The volume of sales contracts and closings typically varies from
quarter to quarter depending on the stages of development of
Levitts projects. In the early stages of a projects
development (two to three years depending on the project),
Levitt incurs significant
start-up
costs associated with, among other things, project design, land
acquisition and development, construction and marketing
expenses. Since revenues from sales of properties are generally
recognized only upon the transfer of title at the closing of a
sale, no revenue is recognized during the early stages of a
project unless land parcels or residential homesites are sold to
other developers. Levitts costs and expenses were
approximately $607.8 million, $500.6 million and
$484.9 million during the years ended December 31, 2006,
2005 and 2004, respectively. For the quarter ended
March 31, 2007, Levitts costs and expenses were
approximately $146.3 million. Periodic sales of properties
may be insufficient to fund operating expenses and the current
trends Levitt is experiencing with respect to new sales and
cancellations in its homebuilding operations makes it likely
that Levitts level of sales over the next 12 months
will be significantly below past levels. Further, if sales and
other revenues are not adequate to cover costs and expenses,
Levitt will be required to seek a source of additional operating
funds. Accordingly, Levitts financial results will vary
from community to community and from time to time.
Levitt
may not successfully integrate acquired
businesses.
As part of Levitts business strategy, Levitt has in the
past and expects to continue to evaluate acquisition prospects
that would complement Levitts existing business, or that
might otherwise offer growth opportunities. Acquisitions entail
numerous risks, including:
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difficulties in assimilating acquired management and operations;
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risks associated with achieving profitability;
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the incurrence of significant due diligence expenses relating to
acquisitions that are not completed;
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unforeseen expenses;
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integrating information technologies;
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risks associated with entering new markets in which Levitt has
no or limited prior experience;
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the potential loss of key employees of acquired
organizations; and
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risks associated with transferred assets and liabilities.
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Levitt may not be able to acquire or profitably manage
additional businesses, or to integrate successfully any acquired
businesses, properties or personnel into its business, without
substantial costs, delays or other operational or financial
difficulties. Levitts failure to do so could have a
material adverse effect on its business, financial condition and
results of operations. If Levitt is unable to successfully
realize the anticipated benefits of an acquisition, Levitt may
be required to incur an impairment charge with respect to any
goodwill recognized in the acquisition. For the year ended
December 31, 2006, $1.3 million of goodwill recorded
in connection with Levitts acquisition of Bowden Homes in
2004 was fully written off. In addition, Levitt may incur debt
or contingent liabilities in connection with future
acquisitions, which could materially adversely affect its
operating results.
Levitt
owns a significant, illiquid investment in Bluegreen, from which
Levitt does not expect to receive any cash flow.
Levitt owns approximately 31% of the outstanding common stock of
Bluegreen, a publicly-traded corporation whose common stock is
listed on the New York Stock Exchange under the symbol
BXG. Although traded on the New York Stock Exchange,
the shares of Bluegreens common stock owned by Levitt may
be deemed restricted stock, which would limit Levitts
ability to liquidate its investment in Bluegreen if it chose to
26
do so. While Levitt has made a significant investment in
Bluegreen, it does not expect to receive any dividends from
Bluegreen for the foreseeable future.
Levitts
results of operations would be adversely affected by decreased
earnings or losses at Bluegreen.
For the year ended December 31, 2006, Levitts
earnings from its investment in Bluegreen were
$9.7 million, decreasing from $12.7 million and
$13.1 million for the years ended December 31, 2005,
and 2004, respectively. For the quarter ended March 31,
2007, Levitts earnings from its investment in Bluegreen
were approximately $1.7 million. At March 31, 2007,
the book value of Levitts investment in Bluegreen was
$108.6 million. Accordingly, a significant portion of
Levitts earnings and book value are dependent upon
Bluegreens ability to continue to generate earnings and
maintain its market value. Further, declines in the market value
of the shares of Bluegreens common stock or other events
that could impair the value of Levitts holdings would have
an adverse impact on the value of Levitts investment in
Bluegreen. Levitt annually reviews its investment in Bluegreen
for impairment. You are referred to the public reports filed by
Bluegreen with the SEC for information regarding Bluegreen.
Risks
Associated with the Restaurant Industry and Our Investment in
Benihana
We have an investment in preferred shares of Benihana which are
convertible to common stock. As such, the value of our
investment will be influenced by the market performance of
Benihanas stock. Some of the risk factors common to the
restaurant industry which might affect the performance of
Benihana are as follows:
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Changes in consumer preferences and discretionary spending;
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Ability to compete with many food service businesses;
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The availability and quality of ingredients and changes in food
and supply costs could adversely affect results of operations;
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Food service industry is affected by litigation and publicity
concerning food quality, health and other issues, which could
cause customers to avoid a particular restaurant, result in
significant liabilities or litigation costs or damage reputation
or brand recognition;
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Health concerns relating to the consumption of food products
could affect consumer preferences and could negatively impact
results of operations;
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Increased labor costs or labor shortages could adversely affect
results of operations;
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The ability to obtain and maintain licenses and permits
necessary to operate restaurants and compliance with laws could
adversely affect operating results;
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Seasonal fluctuations in business could adversely impact stock
price;
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Need for additional capital in the future which might not be
available; and
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The loss of key management personnel.
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Risks
Associated with Our Class A Common Stock and this
Offering
Even
if the merger with Levitt is not consummated, we may use the net
proceeds of this offering to increase our investment in
Levitt.
If the merger with Levitt is not consummated, Levitt would need
to take alternative measures in order to satisfy its liquidity
needs. Levitt has filed a registration statement on
Form S-3 with the SEC with respect to a proposed
distribution to its shareholders of rights to purchase up to
$200 million of shares of its Class A Common Stock. In
the event that the merger is not consummated, Levitt has
indicated that it will pursue the rights offering, in which
case, we currently intend to use the net proceeds of this
offering to participate fully in such rights offering, which
will have the effect of increasing our shareholders
exposure to the homebuilding industry. See Risks
Associated with the Merger with Levitt If the merger
with Levitt is consummated, our shareholders will increase their
exposure to the homebuilding industry, which continues to
experience significant weakness.
We
have never paid cash dividends on our common stock and there is
no assurance that we will pay cash dividends in the
future.
We have never paid regular cash dividends on our common stock,
and we do not anticipate that we will pay cash dividends on our
common stock in the foreseeable future. Further, our ability to
pay cash dividends is
27
dependent on the ability of our subsidiaries to pay sufficient
dividends to us. Our subsidiaries are subject to limitations
that restrict their ability to pay dividends. See Risks
Associated With Us We depend on dividends from our
subsidiaries for a significant portion of our cash flow.
Regulatory restrictions and the terms of indebtedness limit the
ability of some of our subsidiaries to pay dividends.
Alan
B. Levan and John E. Abdos control position may adversely
affect the market price of our common stock.
Alan B. Levan, our Chairman of the board of directors and Chief
Executive Officer, and John E. Abdo, our Vice Chairman of the
board of directors, may be deemed to have beneficially owned at
March 31, 2007 approximately 44.4% of our Class A
Common Stock and 86.4% of our Class B Common Stock. These
shares represented approximately 52.7% of our total common stock
and 77.1% of our total voting power at March 31, 2007.
Additionally, Messrs. Levan and Abdo have entered into a
shareholders agreement and irrevocable proxy with respect to the
shares of Class B Common Stock controlled by them. Under
the agreement, they have agreed to vote their shares of
Class B Common Stock in favor of the election of each other
to our board of directors for so long as they are willing and
able to serve as directors of the Company. Additionally,
Mr. Abdo has granted an irrevocable proxy to an entity
controlled by Mr. Levan and will obtain the consent of
Mr. Levan prior to the sale or conversion of certain of his
shares of Class B Common Stock. Since our Class A
Common Stock and Class B Common Stock vote as a single
class on most matters, Alan B. Levan and John E. Abdo
effectively have the voting power to control the outcome of any
shareholder vote and elect the members of our board of
directors. Alan B. Levan and John E. Abdos control
position may have an adverse effect on the market price of our
common stock.
Certain
provisions of our charter documents may have anti-takeover
effects.
Certain provisions of our Articles of Incorporation and Bylaws
could have the effect of making it more difficult for a third
party to acquire control of the Company. These include
provisions regarding both the voting rights of our Class B
Common Stock and the advance notice procedures to be complied
with by our shareholders in order to make shareholder proposals
or nominate directors, provisions giving our board of directors
the authority to issue additional shares of preferred stock and
to fix the relative rights and preferences of the preferred
stock without additional shareholder approval and provisions
dividing our board of directors into classes with staggered
terms. In addition, our board of directors has in the past
adopted, and has the authority to and may in the future adopt, a
shareholder rights plan, or poison pill, which has
the intended effect of causing substantial dilution to a person
or group who attempts to acquire a significant interest in us
without the approval of our board of directors. These
anti-takeover provisions may have an adverse effect on the
market price of our common stock.
We may
issue additional securities in the future, including in
connection with the merger with Levitt.
There is generally no restriction on our ability to issue debt
or equity securities which are pari passu or have a preference
over our Class A Common Stock. Likewise, there is also no
restriction on the ability of BankAtlantic Bancorp or Levitt to
issue additional capital stock or incur additional indebtedness.
Authorized but unissued shares of our capital stock are
available for issuance from time to time in the discretion of
our board of directors, including issuances in connection with
acquisitions. In connection with, and as part of, the merger
with Levitt, we agreed to amend our Articles of Incorporation to
increase the number of authorized shares of our Class A
Common Stock from 70,000,000 to 130,000,000. If the merger is
consummated, we will issue approximately 37,533,953 shares
of our Class A Common Stock to holders of Levitt
Class A Common Stock and approximately 4,300,000 additional
shares of our Class A Common Stock will be issuable to
holders of options to purchase shares of Levitt Class A
Common Stock. These and other issuances may be dilutive to our
earnings per share or to our shareholders ownership
position.
We do not anticipate that we will seek shareholder approval in
connection with any future issuances of our stock unless we are
required by law or the rules of any stock exchange on which our
securities are listed. There are no limitations on our ability
to incur additional debt or issue additional notes or debentures.
28
The
terms of our Articles of Incorporation, which establish fixed
relative voting percentages between our Class A Common
Stock and Class B Common Stock, may not be well accepted by
the market.
Our Class A Common Stock and Class B Common Stock
generally vote together as a single class. The Class A
Common Stock possesses in the aggregate 22% of the total voting
power of all our common stock and the Class B Common Stock
possesses in the aggregate the remaining 78% of the total voting
power. These relative voting percentages will remain fixed
unless the number of shares of Class B Common Stock
outstanding decreases to 1,800,000 shares, at which time
the Class A Common Stock aggregate voting power will change
to 40% and the Class B Common Stock will have the remaining
60%. If the number of shares of Class B Common Stock
outstanding decreases to 1,400,000 shares, the Class A
Common Stock aggregate voting power will change to a fixed 53%
and the Class B Common Stock will have the remaining 47%.
These relative voting percentages will remain fixed unless the
number of shares of Class B Common Stock outstanding
decreases to 500,000 shares, at which time the fixed voting
percentages will be eliminated. These changes in the relative
voting power represented by each class of our common stock are
based only on the number of shares of Class B Common Stock
outstanding, thus issuances of Class A Common Stock,
including the issuance of shares in connection with the proposed
merger with Levitt, will have no effect on these provisions. As
additional shares of Class A Common Stock are issued, it is
likely that the disparity between the equity interest
represented by the Class B Common Stock and its voting
power will widen. While the amendment creating this capital
structure was approved by our shareholders, the fixed voting
percentage provisions are somewhat unique. If the market does
not sufficiently accept this structure, the trading price and
market for our Class A Common Stock would be adversely
affected.
29
FORWARD
LOOKING STATEMENTS
Except for historical information contained herein, the matters
discussed in this document contain forward-looking statements
within the meaning of Section 27A of the Securities Act of
1933, as amended (the Securities Act), and
Section 21E of the Securities Exchange Act of 1934, as
amended (the Exchange Act), that involve substantial
risks and uncertainties. When used in this document and in any
documents incorporated by reference herein, the words
anticipate, believe,
estimate, may, intend,
expect and similar expressions identify certain of
such forward-looking statements. Actual results, performance, or
achievements could differ materially from those contemplated,
expressed, or implied by the forward-looking statements
contained herein. These forward-looking statements are based
largely on the expectations of BFC and are subject to a number
of risks and uncertainties that are subject to change based on
factors which are, in many instances, beyond the Companys
control. When considering those forward-looking statements, the
reader should keep in mind the risks, uncertainties and other
cautionary statements made in this document, including those
identified in the section entitled Risk Factors.
These risks are subject to change based on factors which are, in
many instances, beyond the Companys control. The reader
should not place undue reliance on any forward-looking
statement, which speaks only as of the date made. We disclaim
any obligation to publicly update or revise any forward-looking
statement to reflect changes in underlying assumptions or
factors, or new information, data or methods, future events or
other changes.
This document also contains information regarding the past
performance of our investments and the reader should note that
prior or current performance of investments and acquisitions is
not a guarantee or indication of future performance. Some
factors which may affect the accuracy of the forward-looking
statements apply generally to the financial services, real
estate development, homebuilding, resort development and
vacation ownership, and restaurant industries, while other
factors apply directly to us. Risks and uncertainties associated
with BFC include, but are not limited to:
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the impact of economic, competitive and other factors affecting
the Company and its subsidiaries, and their operations, markets,
products and services;
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that BFC may not have sufficient available cash to make desired
investments;
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that BFC shareholders interests may be diluted in
transactions utilizing BFC stock for consideration, including in
connection with the proposed merger with Levitt;
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that appropriate investment opportunities on reasonable terms
and at reasonable prices may not be available;
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that the performance of those entities in which investments are
made may not be as anticipated; and
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that BFC will be subject to the unique business and industry
risks and characteristics of each entity in which an investment
is made.
|
With respect to BankAtlantic Bancorp and BankAtlantic, the risks
and uncertainties that may affect BFC include, but are not
limited to:
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the impact of economic, competitive and other factors affecting
BankAtlantic Bancorp and its operations, markets, products and
services;
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credit risks and loan losses, and the related sufficiency of the
allowance for loan losses, including the impact on the credit
quality of BankAtlantic loans of changes in the real estate
markets in their trade area and where their collateral is
located;
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changes in interest rates and the effects of, and changes in,
trade, monetary and fiscal policies and laws including their
impact on the Banks net interest margin;
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adverse conditions in the stock market, the public debt market
and other capital markets and the impact of such conditions on
activities and the value of assets;
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BankAtlantics
seven-day
banking initiatives and other growth, marketing or advertising
initiatives not resulting in continued growth of core deposits
or producing results which do not justify their costs;
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the success of expenses discipline initiatives;
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BankAtlantics new store expansion program, successfully
opening the anticipated number of new stores in 2007 and
achieving growth and profitability at the stores;
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the impact of periodic testing of goodwill and other intangible
assets for impairment;
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30
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the value of the shares of Stifels common stock and, if
received, the warrants to purchase shares of Stifels
common stock, will vary over time; and
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past performance, actual or estimated new account openings and
growth rate may not be indicative of future results.
|
With respect to Levitt, the risks and uncertainties that may
affect us include, but are not limited to:
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the impact of economic, competitive and other factors affecting
Levitt and its operations;
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the market for real estate in the areas where Levitt has
developments, including the impact of market conditions on
Levitts margins and the fair value of Levitts real
estate inventory;
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the accuracy of the estimated fair value of Levitts real
estate inventory and the potential for further impairment
charges;
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the need to offer additional incentives to buyers to generate
sales;
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the effects of increases in interest rates;
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cancellations of existing sales contracts and the ability to
consummate sales contracts included in Levitts backlog;
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Levitts ability to realize the expected benefits of its
expanded platform, technology investments, growth initiatives
and strategic objectives;
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Levitts ability to timely deliver homes from backlog,
shorten delivery cycles and improve operational and construction
efficiency;
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the realization of cost savings associated with reductions of
workforce and the ability to limit overhead and costs
commensurate with sales;
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Levitts ability to maintain sufficient liquidity in the
event of a prolonged downturn in the housing market; and
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Levitts success at managing the risks involved in the
foregoing.
|
With respect to the proposed merger with Levitt, the risks and
uncertainties that may affect us include, but are not limited
to, the risks:
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relating to the effect on our cash flow resulting from a
substantial number of holders of Levitt Class A Common
Stock exercising their appraisal rights in the merger or from
Levitts operations after the merger;
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that the value of our other major investments may decline;
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that the benefits of the merger to either us, Levitt, or both
companies may not be achieved;
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relating to the timing and extent of any homebuilding recovery;
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that the merger may not be consummated as contemplated, or at
all; and
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that we may not be able to access financial resources on
attractive terms, or at all.
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In addition to the risks and factors identified above, reference
is also made to other risks and factors detailed in reports
filed by the Company, BankAtlantic Bancorp and Levitt with the
SEC. The Company cautions that the foregoing factors are not all
inclusive.
31
USE OF
PROCEEDS
We estimate that the net proceeds from the sale of the
10,000,000 shares of our Class A Common Stock we are
offering will be approximately $39,970,000 after deducting
estimated offering expenses and underwriting discounts. For
purposes of this calculation we have assumed a public offering
price of $4.30 per share, which was the closing price of our
Class A Common Stock on the NYSE Arca on May 16, 2007.
We currently intend to use the net proceeds of this offering to
support Levitt and for our general corporate purposes, including
working capital and potential new investments. If the proposed
merger with Levitt is consummated, we currently intend to use
the net proceeds of this offering primarily to provide Levitt,
which will be our wholly-owned subsidiary following the merger,
with working capital. Levitt has indicated that, if the merger
is not consummated for any reason, it currently intends to
pursue a rights offering to holders of its common stock, giving
each such holder, including BFC, the right to purchase a
proportional number of additional shares of Levitts
Class A Common Stock. In the event that the merger is not
consummated, we currently intend to use the net proceeds of this
offering primarily to participate fully in any rights offering
made by Levitt or to otherwise make additional debt or equity
investments in Levitt.
From time to time in the ordinary course of our business, we
evaluate potential business investment or acquisition
opportunities, some of which may be material. At the present
time, we have not reached any agreements relating to any
material business investment or acquisition.
The precise amounts and timing of the application of such
proceeds depends upon many factors, including, but not limited
to, the amount of any such proceeds and whether or not the
proposed merger with Levitt is consummated, and if not so
consummated, the timing and consummation of any rights offering
pursued by Levitt. Until the proceeds are used, we intend to
invest the net proceeds in short and long-term investments,
including, but not limited to treasury bills, commercial paper,
certificates of deposit, securities issued by
U.S. government agencies, money market funds, repurchase
agreements and other similar investments.
32
PRICE
RANGE OF COMMON STOCK
Our Class A Common Stock is listed for trading on the NYSE
Arca under the trading symbol BFF. Prior to
June 22, 2006, our Class A Common Stock was quoted on
the NASDAQ National Market under the trading symbol
BFCF. Our Class B Common Stock is quoted on the
OTC Bulletin Board under the symbol BFCFB.OB.
The following table sets forth, for the indicated periods, the
high and low per share sales prices for our Class A Common
Stock as reported on the NASDAQ National Market, with respect to
the time period prior to June 22, 2006, and as reported on
the NYSE Arca, with respect to the time period on and after such
date, and for our Class B Common Stock as reported by the
National Association of Securities Dealers Automated Quotation
System. The stock prices do not include retail
mark-ups,
mark-downs or commissions.
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Class A Common Stock:
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High
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Low
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2007
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|
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First Quarter
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$
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6.90
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$
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4.17
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Second Quarter (through
May 16, 2007)
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5.00
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3.59
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2006
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|
|
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First Quarter
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$
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6.64
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$
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5.35
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Second Quarter
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|
8.16
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|
|
|
5.69
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Third Quarter
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|
|
7.10
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|
|
|
4.35
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|
Fourth Quarter
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|
|
7.06
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|
|
|
4.80
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|
|
|
|
|
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|
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2005
|
|
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|
|
|
|
|
|
First Quarter
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|
$
|
11.34
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|
$
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9.04
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|
Second Quarter
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|
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10.29
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|
|
|
7.81
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|
Third Quarter
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|
|
9.00
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|
|
|
6.81
|
|
Fourth Quarter
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|
|
7.05
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|
|
|
4.90
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|
|
|
|
|
|
|
|
|
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Class B Common Stock:
|
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High
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Low
|
|
2007
|
|
|
|
|
|
|
|
|
First Quarter
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$
|
6.55
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|
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$
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5.00
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Second Quarter (through
May 16, 2007)
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|
|
5.00
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|
|
|
3.60
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|
|
|
|
|
|
|
|
|
2006
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
6.50
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|
|
$
|
5.25
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|
Second Quarter
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|
|
7.70
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|
|
|
5.70
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|
Third Quarter
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|
|
8.25
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|
|
|
5.00
|
|
Fourth Quarter
|
|
|
6.80
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|
|
|
4.85
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|
|
|
|
|
|
|
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|
2005
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
11.12
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|
|
$
|
9.20
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|
Second Quarter
|
|
|
10.70
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|
|
|
7.80
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|
Third Quarter
|
|
|
8.70
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|
|
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7.00
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|
Fourth Quarter
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|
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6.75
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|
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4.85
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On May 16, 2007, the closing sale price of our Class A
Common Stock as reported on the NYSE Arca was $4.30 per share
and the closing sale price of our Class B Common Stock as
reported by the National Association of Securities Dealers
Automated Quotation System was $4.60 per share.
As of May 16, 2007, there were approximately 3,340 holders
of record of our Class A Common Stock and approximately 760
holders of record of our Class B Common Stock.
33
DIVIDEND
POLICY
We have not declared or distributed cash dividends to the
holders of either our Class A Common Stock or our
Class B Common Stock since our inception in 1980, and it is
not likely that any cash dividends on our common stock will be
declared in the foreseeable future. Our board of directors
intends, for the foreseeable future, to follow a policy of
retaining all of our earnings to finance the operations and
expansion of our business.
34
CAPITALIZATION
The following table sets forth the parent company only
capitalization of BFC on (i) an actual basis at
March 31, 2007, (ii) an as adjusted basis to reflect
the sale of the 10,000,000 shares of Class A Common
Stock offered by us in this offering at a price of
$4.30 per share, the closing price of our Class A
Common Stock on the NYSE Arca on May 16, 2007 (after
deducting underwriting discounts and estimated offering
expenses), and the application of the estimated net proceeds
from the offering as described in the section of this prospectus
entitled Use of Proceeds on page 32 and
(iii) a pro forma, as adjusted basis to reflect the sale of
the 10,000,000 shares of Class A Common Stock offered
by us in this offering, the application of the estimated net
proceeds of this offering and the consummation of the merger
with Levitt. You should read the information in the following
table in conjunction with our consolidated financial statements
and related notes thereto contained in our Annual Report on
Form 10-K
for the year ended December 31, 2006 and Amendment
No. 1 to our Quarterly Report on
Form 10-Q/A
for the quarter ended March 31, 2007, which are
incorporated herein by reference.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2007
|
|
|
Actual
|
|
As Adjusted
|
|
Pro Forma, As Adjusted
|
|
|
(Dollars in thousands, except for share and per share
data)
|
|
Note payable
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $.01 par
value, 10,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
|
|
|
|
5% Cumulative Convertible Preferred
Stock, 15,000 shares issued and outstanding,
15,000 shares issued and outstanding, as adjusted and pro
forma, as adjusted
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Class A Common Stock,
$.01 par value, 70,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) 28,755,904 shares
issued and outstanding, (ii) 38,755,904 shares issued
and outstanding, as adjusted, (iii) 76,289,857 shares
issued and outstanding, pro forma, as adjusted(1)(2)
|
|
|
266
|
|
|
|
366
|
|
|
|
741
|
|
Class B Common Stock,
$.01 par value, 20,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
|
|
|
|
7,090,652 shares issued and
outstanding, 7,090,652 issued and outstanding, as adjusted and
pro forma, as adjusted(3)
|
|
|
69
|
|
|
|
69
|
|
|
|
69
|
|
Additional paid-in capital
|
|
|
93,934
|
|
|
|
133,804
|
|
|
|
373,016
|
|
Retained earnings
|
|
|
81,249
|
|
|
|
81,249
|
|
|
|
81,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders equity
before accumulated other comprehensive income
|
|
|
175,518
|
|
|
|
215,488
|
|
|
|
455,075
|
|
Accumulated other comprehensive
income
|
|
|
1,243
|
|
|
|
1,243
|
|
|
|
1,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
|
176,761
|
|
|
|
216,731
|
|
|
|
456,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
$
|
176,761
|
|
|
$
|
216,731
|
|
|
$
|
456,318
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per share
|
|
$
|
4.82
|
|
|
$
|
4.63
|
|
|
$
|
5.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
In connection with the proposed
merger with Levitt and subject to the approval of our
shareholders, we will increase the number of authorized shares
of our Class A Common Stock from 70,000,000 to 130,000,000.
|
|
|
|
(2)
|
|
Does not include (i) an
additional 1,500,000 shares of Class A Common Stock
issuable upon exercise of the underwriters over-allotment
option, (ii) 1,562,000 shares of Class A Common
Stock issuable upon conversion of the Companys 5%
Cumulative Convertible Preferred Stock, or
(iii) 468,000 shares of Class A Common Stock
issuable upon the exercise of outstanding options at May 8,
2007 with a weighted average exercise price of $7.63 per
share.
|
|
|
|
(3)
|
|
Does not include
1,139,087 shares of our Class B Common Stock issuable
upon the exercise of outstanding options at May 8, 2007
with a weighted average exercise price of $3.75 per share.
|
35
SELECTED
CONSOLIDATED FINANCIAL AND OTHER DATA
The following table sets forth selected consolidated financial
and other data for BFC as of, and for the years ended,
December 31, 2002 through 2006 and as of, and for the three
months ended, March 31, 2006 and 2007. Certain selected
consolidated financial and other data presented below as of, and
for the years ended, December 31, 2002 through 2006 are
derived from our consolidated financial statements. The selected
consolidated financial and other data as of, and for the three
months ended, March 31, 2006 and 2007 are derived from our
unaudited consolidated financial statements and reflect, in the
opinion of management, all adjustments (consisting only of
normal recurring adjustments) necessary for a fair statement of
such data. Results for the three months ended March 31,
2007 are not necessarily indicative of results that may be
expected for the entire year or any future period. The following
table is a summary and should be read in conjunction with
Managements Discussion and Analysis of Results of
Operations and Financial Condition and the consolidated
financial statements and related notes contained in our Annual
Report on
Form 10-K
for the year ended December 31, 2006 and Amendment
No. 1 to our Quarterly Report on Form 10-Q/A for the
quarter ended March 31, 2007, which are incorporated herein
by reference.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
|
|
|
the Three Months
|
|
|
|
|
Ended March 31,
|
|
For the Years Ended December 31,
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
2002
|
|
|
(Dollars in thousands, except for per share data)
|
|
Income Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BFC Activities
|
|
$
|
1,450
|
|
|
$
|
1,003
|
|
|
$
|
3,682
|
|
|
$
|
3,129
|
|
|
$
|
5,683
|
|
|
$
|
1,073
|
|
|
$
|
607
|
|
Financial Services
|
|
|
129,107
|
|
|
|
117,316
|
|
|
|
507,746
|
|
|
|
445,537
|
|
|
|
358,703
|
|
|
|
320,534
|
|
|
|
350,987
|
|
Homebuilding & Real
Estate Development
|
|
|
145,968
|
|
|
|
128,242
|
|
|
|
583,152
|
|
|
|
574,824
|
|
|
|
558,838
|
|
|
|
288,686
|
|
|
|
212,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
276,525
|
|
|
|
246,561
|
|
|
|
1,094,580
|
|
|
|
1,023,490
|
|
|
|
923,224
|
|
|
|
610,293
|
|
|
|
563,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BFC Activities
|
|
|
3,417
|
|
|
|
3,170
|
|
|
|
12,370
|
|
|
|
9,665
|
|
|
|
7,452
|
|
|
|
7,019
|
|
|
|
5,141
|
|
Financial Services
|
|
|
132,779
|
|
|
|
106,875
|
|
|
|
474,311
|
|
|
|
381,916
|
|
|
|
280,431
|
|
|
|
275,507
|
|
|
|
321,243
|
|
Homebuilding & Real
Estate Development
|
|
|
146,035
|
|
|
|
129,134
|
|
|
|
606,655
|
|
|
|
498,760
|
|
|
|
481,618
|
|
|
|
253,169
|
|
|
|
191,662
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
282,231
|
|
|
|
239,179
|
|
|
|
1,093,336
|
|
|
|
890,341
|
|
|
|
769,501
|
|
|
|
535,695
|
|
|
|
518,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings from
unconsolidated affiliates
|
|
|
2,893
|
|
|
|
771
|
|
|
|
10,935
|
|
|
|
13,404
|
|
|
|
19,603
|
|
|
|
10,126
|
|
|
|
9,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing
operations
|
|
|
(2,813
|
)
|
|
|
8,153
|
|
|
|
12,179
|
|
|
|
146,553
|
|
|
|
173,326
|
|
|
|
84,724
|
|
|
|
54,956
|
|
(Benefit) provision for income taxes
|
|
|
(272
|
)
|
|
|
2,514
|
|
|
|
(528
|
)
|
|
|
59,566
|
|
|
|
70,920
|
|
|
|
36,466
|
|
|
|
19,615
|
|
Noncontrolling interest
|
|
|
(915
|
)
|
|
|
5,729
|
|
|
|
13,404
|
|
|
|
79,267
|
|
|
|
90,388
|
|
|
|
43,616
|
|
|
|
33,501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing
operations
|
|
|
(1,626
|
)
|
|
|
(90
|
)
|
|
|
(697
|
)
|
|
|
7,720
|
|
|
|
12,018
|
|
|
|
4,642
|
|
|
|
1,840
|
|
(Loss) income from discontinued
operations, net of noncontrolling interest and income taxes
|
|
|
1,053
|
|
|
|
(209
|
)
|
|
|
(1,524
|
)
|
|
|
5,054
|
|
|
|
2,212
|
|
|
|
2,380
|
|
|
|
2,151
|
|
Income from extraordinary items,
net of noncontrolling interest and income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,298
|
|
Cumulative effect of a change in
accounting principle, net of noncontrolling interest and income
taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,097
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
(573
|
)
|
|
|
(299
|
)
|
|
|
(2,221
|
)
|
|
|
12,774
|
|
|
|
14,230
|
|
|
|
7,022
|
|
|
|
5,192
|
|
5% Preferred Stock dividends
|
|
|
(188
|
)
|
|
|
(188
|
)
|
|
|
(750
|
)
|
|
|
(750
|
)
|
|
|
(392
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income allocable to
common stock
|
|
$
|
(761
|
)
|
|
$
|
(487
|
)
|
|
$
|
(2,971
|
)
|
|
$
|
12,024
|
|
|
$
|
13,838
|
|
|
$
|
7,022
|
|
|
$
|
5,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share
Data (a),(c),(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per share
from continuing operations
|
|
$
|
(0.05
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.24
|
|
|
$
|
0.48
|
|
|
$
|
0.21
|
|
|
$
|
0.08
|
|
Discontinued operations
|
|
|
0.03
|
|
|
|
|
|
|
|
(0.05
|
)
|
|
|
0.18
|
|
|
|
0.09
|
|
|
|
0.10
|
|
|
|
0.10
|
|
Extraordinary items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.15
|
|
Cumulative effect of a change in
accounting principle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per share of
common stock
|
|
$
|
(0.02
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
0.42
|
|
|
$
|
0.57
|
|
|
$
|
0.31
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share
from continuing operations
|
|
$
|
(0.05
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
0.22
|
|
|
$
|
0.40
|
|
|
$
|
0.16
|
|
|
$
|
0.07
|
|
Discontinued operations
|
|
|
0.03
|
|
|
|
(0.01
|
)
|
|
|
(0.05
|
)
|
|
|
0.15
|
|
|
|
0.07
|
|
|
|
0.09
|
|
|
|
0.09
|
|
Extraordinary items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.14
|
|
Cumulative effect of a change in
accounting principle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings per share
of common stock
|
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.37
|
|
|
$
|
0.47
|
|
|
$
|
0.25
|
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average number of
common shares outstanding
|
|
|
33,444
|
|
|
|
32,692
|
|
|
|
33,249
|
|
|
|
28,952
|
|
|
|
24,183
|
|
|
|
22,818
|
|
|
|
22,454
|
|
Diluted weighted average number of
common shares outstanding
|
|
|
33,444
|
|
|
|
32,692
|
|
|
|
33,249
|
|
|
|
31,219
|
|
|
|
27,806
|
|
|
|
26,031
|
|
|
|
22,454
|
|
Ratio of earnings to fixed
charges (e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.28
|
|
|
|
|
|
Dollar deficiency of earnings to
fixed charges (e)
|
|
$
|
916
|
|
|
$
|
1,326
|
|
|
$
|
5,197
|
|
|
$
|
7,217
|
|
|
$
|
4,145
|
|
|
$
|
|
|
|
$
|
1,347
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31,
|
|
As of December 31,
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
2002
|
|
|
(Dollars in thousands, except for per share data)
|
|
|
|
Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and leases, net
|
|
$
|
4,625,865
|
|
|
$
|
4,528,530
|
|
|
$
|
4,603,505
|
|
|
$
|
4,628,744
|
|
|
$
|
4,561,073
|
|
|
$
|
3,611,612
|
|
|
$
|
3,377,870
|
|
Securities
|
|
|
1,130,363
|
|
|
|
1,054,410
|
|
|
|
1,081,980
|
|
|
|
1,064,857
|
|
|
|
1,082,985
|
|
|
|
553,148
|
|
|
|
975,516
|
|
Total assets
|
|
|
7,523,794
|
|
|
|
7,308,003
|
|
|
|
7,605,766
|
|
|
|
7,395,755
|
|
|
|
6,954,847
|
|
|
|
5,136,235
|
|
|
|
5,415,933
|
|
Deposits
|
|
|
4,085,022
|
|
|
|
3,960,766
|
|
|
|
3,867,036
|
|
|
|
3,752,676
|
|
|
|
3,457,202
|
|
|
|
3,058,141
|
|
|
|
2,920,555
|
|
Securities sold under agreements to
repurchase and federal funds purchased
|
|
|
119,513
|
|
|
|
156,675
|
|
|
|
128,411
|
|
|
|
249,263
|
|
|
|
257,002
|
|
|
|
120,874
|
|
|
|
116,279
|
|
Other borrowings (f)
|
|
|
2,261,784
|
|
|
|
1,978,668
|
|
|
|
2,426,000
|
|
|
|
2,131,976
|
|
|
|
2,086,368
|
|
|
|
1,209,571
|
|
|
|
1,686,613
|
|
Shareholders equity
|
|
|
176,761
|
|
|
|
178,368
|
|
|
|
177,585
|
|
|
|
183,080
|
|
|
|
125,251
|
|
|
|
85,675
|
|
|
|
77,411
|
|
Book value per share (d),(g)
|
|
|
4.82
|
|
|
|
4.87
|
|
|
|
4.84
|
|
|
|
5.25
|
|
|
|
4.25
|
|
|
|
3.68
|
|
|
|
3.45
|
|
Return on average equity (b)(h)
|
|
|
(0.32
|
)%
|
|
|
(0.17
|
)%
|
|
|
(1.24
|
)%
|
|
|
8.08
|
%
|
|
|
13.16
|
%
|
|
|
8.63
|
%
|
|
|
6.85
|
%
|
BankAtlantic Asset quality
ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-performing assets, net of
reserves as a percent of total loans, tax certificates and real
estate owned
|
|
|
1.02
|
%
|
|
|
0.18
|
%
|
|
|
0.55
|
%
|
|
|
0.17
|
%
|
|
|
0.19
|
%
|
|
|
0.36
|
%
|
|
|
0.86
|
%
|
Loan loss allowance as a percent of
non-performing loans
|
|
|
195.65
|
%
|
|
|
686.59
|
%
|
|
|
982.89
|
%
|
|
|
605.68
|
%
|
|
|
582.18
|
%
|
|
|
422.06
|
%
|
|
|
235.61
|
%
|
Loan loss allowance as a percentage
of total loans
|
|
|
1.08
|
%
|
|
|
0.94
|
%
|
|
|
0.94
|
%
|
|
|
0.88
|
%
|
|
|
1.00
|
%
|
|
|
1.24
|
%
|
|
|
1.38
|
%
|
Capital Ratios for
BankAtlantic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total risk based capital
|
|
|
12.11
|
%
|
|
|
12.21
|
%
|
|
|
12.08
|
%
|
|
|
11.50
|
%
|
|
|
10.80
|
%
|
|
|
12.06
|
%
|
|
|
11.89
|
%
|
Tier I risk based capital
|
|
|
10.49
|
%
|
|
|
10.65
|
%
|
|
|
10.50
|
%
|
|
|
10.02
|
%
|
|
|
9.19
|
%
|
|
|
10.22
|
%
|
|
|
10.01
|
%
|
Leverage
|
|
|
7.51
|
%
|
|
|
7.75
|
%
|
|
|
7.55
|
%
|
|
|
7.42
|
%
|
|
|
6.83
|
%
|
|
|
8.52
|
%
|
|
|
7.26
|
%
|
Levitt Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated margin on sales of
real estate
|
|
$
|
28,390
|
|
|
$
|
23,488
|
|
|
$
|
83,125
|
|
|
$
|
150,030
|
|
|
$
|
143,378
|
|
|
$
|
73,627
|
|
|
$
|
48,133
|
|
Consolidated Margin
|
|
|
20.00
|
%
|
|
|
18.71
|
%
|
|
|
14.70
|
%
|
|
|
26.90
|
%
|
|
|
26.10
|
%
|
|
|
26.00
|
%
|
|
|
23.20
|
%
|
Homes delivered (units)
|
|
|
362
|
|
|
|
439
|
|
|
|
1,660
|
|
|
|
1,789
|
|
|
|
2,126
|
|
|
|
1,011
|
|
|
|
740
|
|
Backlog of homes (units)
|
|
|
1,045
|
|
|
|
1,859
|
|
|
|
1,248
|
|
|
|
1,792
|
|
|
|
1,814
|
|
|
|
2,053
|
|
|
|
824
|
|
Backlog of homes (sales value)
|
|
$
|
359,029
|
|
|
$
|
608,437
|
|
|
$
|
438,240
|
|
|
$
|
557,325
|
|
|
$
|
448,647
|
|
|
$
|
458,771
|
|
|
$
|
167,526
|
|
Land division acres sold
|
|
|
0
|
|
|
|
56
|
|
|
|
371
|
|
|
|
1,647
|
|
|
|
1,212
|
|
|
|
1,337
|
|
|
|
1,715
|
|
|
|
|
(a)
|
|
Since its inception, the Company
has not paid any cash dividends on its common stock.
|
|
|
|
(b)
|
|
Ratios were computed using
quarterly averages.
|
|
|
|
(c)
|
|
While the Company has two classes
of common stock outstanding, the two-class method is not
presented because the Companys capital structure does not
provide for different dividend rates or other preferences, other
than voting rights, between the two classes.
|
|
|
|
(d)
|
|
I.R.E. Realty Advisory Group, Inc.
(RAG) owns 4,764,282 shares of the
Companys Class A Common Stock and 500,000 shares
of the Companys Class B Common Stock. Because the
Company owns 45.5% of the outstanding common stock of RAG,
2,165,367 shares of the Companys Class A Common
Stock and 227,500 shares of the Companys Class B
Common Stock are eliminated from the number of shares
outstanding for purposes of computing earnings per share and
book value per share.
|
|
|
|
(e)
|
|
The operations, fixed charges and
dividends of BankAtlantic Bancorp and Levitt are not included in
the calculation because those subsidiaries are separate,
publicly traded companies whose Boards of Directors are composed
of individuals, a majority of whom are independent. Accordingly,
decisions made by those Boards, including with respect to the
payment of dividends, are not within the Companys control.
|
|
|
|
(f)
|
|
Other borrowings consist of FHLB
advances, subordinated debentures, notes, mortgage notes
payable, bonds payable, secured borrowings, and junior
subordinated debentures. Secured borrowings were recognized on
loan participation agreements that constituted a legal sale of a
portion of the loan but that were not qualified to be accounted
for as a loan sale.
|
|
|
|
(g)
|
|
Preferred stock redemption price is
eliminated from shareholders equity for purposes of
computing book value per share.
|
|
|
|
(h)
|
|
The return on average equity is
equal to net income (loss) divided by average consolidated
shareholders equity during the respective year.
|
37
SELECTED
PARENT COMPANY ONLY FINANCIAL DATA
The following table sets forth selected parent company only
financial data as of, and for the years ended, December 31,
2002 through 2006 and as of, and for the three months ended
March 31, 2006 and 2007. Certain selected parent company
only financial data presented below as of, and for the years
ended, December 31, 2002 through 2006 are derived from our
consolidated financial statements. The selected parent company
only financial data as of, and for the three months ended,
March 31, 2006 and 2007 are derived from our unaudited
parent company only financial statements and reflect, in the
opinion of management, all adjustments (consisting only of
normal recurring adjustments) necessary for a fair statement of
such data. Results for the three months ended March 31,
2007 are not necessarily indicative of results that may be
expected for the entire year or any future period. The following
table is a summary and should be read in conjunction with
Managements Discussion and Analysis of Results of
Operations and Financial Condition and the consolidated
financial statements and related notes contained in our Annual
Report on
Form 10-K
for the year ended December 31, 2006 and Amendment
No. 1 to our Quarterly Report on Form 10-Q/A for the
quarter ended March 31, 2007, which are incorporated herein
by reference.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for the
|
|
As of or for the
|
|
|
Three Months Ended
|
|
Years Ended
|
|
|
March 31,
|
|
December 31,
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
2002
|
|
|
(In thousands)
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
15,910
|
|
|
$
|
19,464
|
|
|
$
|
17,815
|
|
|
$
|
26,683
|
|
|
$
|
1,520
|
|
|
$
|
1,536
|
|
|
$
|
797
|
|
Investment securities
|
|
|
2,211
|
|
|
|
2,434
|
|
|
|
2,262
|
|
|
|
2,034
|
|
|
|
1,800
|
|
|
|
1,218
|
|
|
|
1,269
|
|
Investment in Benihana, Inc.
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
Investment in venture partnerships
|
|
|
904
|
|
|
|
941
|
|
|
|
908
|
|
|
|
950
|
|
|
|
971
|
|
|
|
626
|
|
|
|
2,782
|
|
Investment in BankAtlantic Bancorp,
Inc.
|
|
|
113,658
|
|
|
|
112,119
|
|
|
|
113,586
|
|
|
|
112,218
|
|
|
|
103,125
|
|
|
|
91,869
|
|
|
|
106,017
|
|
Investment in Levitt Corporation
|
|
|
57,255
|
|
|
|
58,070
|
|
|
|
57,009
|
|
|
|
58,111
|
|
|
|
48,983
|
|
|
|
27,885
|
|
|
|
|
|
Investment in and advances to
wholly-owned subsidiaries
|
|
|
2,056
|
|
|
|
1,612
|
|
|
|
1,525
|
|
|
|
1,631
|
|
|
|
31,867
|
|
|
|
30,877
|
|
|
|
30,749
|
|
Loans receivable
|
|
|
1,987
|
|
|
|
1,500
|
|
|
|
2,157
|
|
|
|
2,071
|
|
|
|
3,364
|
|
|
|
4,175
|
|
|
|
4,175
|
|
Other assets
|
|
|
2,516
|
|
|
|
2,821
|
|
|
|
2,261
|
|
|
|
960
|
|
|
|
2,697
|
|
|
|
484
|
|
|
|
768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
216,497
|
|
|
$
|
218,961
|
|
|
$
|
217,523
|
|
|
$
|
224,658
|
|
|
$
|
204,327
|
|
|
$
|
158,670
|
|
|
$
|
146,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
10,483
|
|
|
$
|
6,015
|
|
|
$
|
6,015
|
|
Advances from and negative basis in
wholly-owned subsidiaries
|
|
|
1,373
|
|
|
|
544
|
|
|
|
1,290
|
|
|
|
462
|
|
|
|
34,636
|
|
|
|
33,977
|
|
|
|
33,634
|
|
Other liabilities
|
|
|
6,636
|
|
|
|
6,615
|
|
|
|
7,351
|
|
|
|
7,417
|
|
|
|
6,929
|
|
|
|
6,454
|
|
|
|
6,300
|
|
Deferred income taxes
|
|
|
31,727
|
|
|
|
33,434
|
|
|
|
31,297
|
|
|
|
33,699
|
|
|
|
27,028
|
|
|
|
26,549
|
|
|
|
23,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
39,736
|
|
|
|
40,593
|
|
|
|
39,938
|
|
|
|
41,578
|
|
|
|
79,076
|
|
|
|
72,995
|
|
|
|
69,146
|
|
Total shareholders equity
|
|
|
176,761
|
|
|
|
178,368
|
|
|
|
177,585
|
|
|
|
183,080
|
|
|
|
125,251
|
|
|
|
85,675
|
|
|
|
77,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders equity
|
|
$
|
216,497
|
|
|
$
|
218,961
|
|
|
$
|
217,523
|
|
|
$
|
224,658
|
|
|
$
|
204,327
|
|
|
$
|
158,670
|
|
|
$
|
146,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statements of Operations
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
559
|
|
|
$
|
573
|
|
|
$
|
2,232
|
|
|
$
|
1,775
|
|
|
$
|
3,514
|
|
|
$
|
1,051
|
|
|
$
|
763
|
|
Expenses
|
|
|
1,914
|
|
|
|
2,220
|
|
|
|
8,413
|
|
|
|
14,904
|
|
|
|
6,717
|
|
|
|
3,954
|
|
|
|
3,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) before earnings (loss) from
subsidiaries
|
|
|
(1,355
|
)
|
|
|
(1,647
|
)
|
|
|
(6,181
|
)
|
|
|
(13,129
|
)
|
|
|
(3,203
|
)
|
|
|
(2,903
|
)
|
|
|
(3,135
|
)
|
(Loss) equity from earnings in
BankAtlantic Bancorp
|
|
|
(477
|
)
|
|
|
1,404
|
|
|
|
5,807
|
|
|
|
9,053
|
|
|
|
11,817
|
|
|
|
11,911
|
|
|
|
7,443
|
|
Equity from earnings (loss) in
Levitt
|
|
|
162
|
|
|
|
(109
|
)
|
|
|
(1,522
|
)
|
|
|
9,125
|
|
|
|
10,265
|
|
|
|
|
|
|
|
|
|
Equity from earnings (loss) in
wholly-owned subsidiaries
|
|
|
15
|
|
|
|
(32
|
)
|
|
|
(658
|
)
|
|
|
6,671
|
|
|
|
(35
|
)
|
|
|
(1,428
|
)
|
|
|
(559
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes
|
|
|
(1,655
|
)
|
|
|
(384
|
)
|
|
|
(2,554
|
)
|
|
|
11,720
|
|
|
|
18,844
|
|
|
|
7,580
|
|
|
|
3,749
|
|
(Benefit) provision for income taxes
|
|
|
(29
|
)
|
|
|
(294
|
)
|
|
|
(1,857
|
)
|
|
|
4,000
|
|
|
|
6,826
|
|
|
|
2,938
|
|
|
|
1,909
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing
operations
|
|
|
(1,626
|
)
|
|
|
(90
|
)
|
|
|
(697
|
)
|
|
|
7,720
|
|
|
|
12,018
|
|
|
|
4,642
|
|
|
|
1,840
|
|
Equity (loss) in subsidiaries
discontinued operations, net of tax
|
|
|
1,053
|
|
|
|
(209
|
)
|
|
|
(1,524
|
)
|
|
|
5,054
|
|
|
|
2,212
|
|
|
|
2,380
|
|
|
|
2,151
|
|
Income from extraordinary item, net
of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,298
|
|
Cumulative effect of a change in
accounting principle, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,097
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
(573
|
)
|
|
|
(299
|
)
|
|
|
(2,221
|
)
|
|
|
12,774
|
|
|
|
14,230
|
|
|
|
7,022
|
|
|
|
5,192
|
|
5% Preferred Stock dividends
|
|
|
(188
|
)
|
|
|
(188
|
)
|
|
|
(750
|
)
|
|
|
(750
|
)
|
|
|
(392
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income allocable to
common stock
|
|
$
|
(761
|
)
|
|
$
|
(487
|
)
|
|
$
|
(2,971
|
)
|
|
$
|
12,024
|
|
|
$
|
13,838
|
|
|
$
|
7,022
|
|
|
$
|
5,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statements of Cash Flow
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing
operations
|
|
$
|
(1,626
|
)
|
|
$
|
(90
|
)
|
|
$
|
(697
|
)
|
|
$
|
7,720
|
|
|
$
|
12,018
|
|
|
$
|
4,642
|
|
|
$
|
1,840
|
|
Equity (loss) in subsidiaries
discontinued operations, net of tax
|
|
|
1,053
|
|
|
|
(209
|
)
|
|
|
(1,524
|
)
|
|
|
5,054
|
|
|
|
2,212
|
|
|
|
2,380
|
|
|
|
2,151
|
|
Income from extraordinary item, net
of income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,298
|
|
Cumulative effect of a change in
accounting principle, net of taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,097
|
)
|
Other operating activities
|
|
|
(1,053
|
)
|
|
|
(1,577
|
)
|
|
|
(820
|
)
|
|
|
(12,709
|
)
|
|
|
(18,243
|
)
|
|
|
(7,694
|
)
|
|
|
(8,313
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
operating activities
|
|
$
|
(1,605
|
)
|
|
$
|
(1,876
|
)
|
|
|
(3,041
|
)
|
|
$
|
65
|
|
|
$
|
(4,013
|
)
|
|
$
|
(672
|
)
|
|
$
|
(3,121
|
)
|
Net cash (used in) provided by
investing activities
|
|
|
|
|
|
|
(1,000
|
)
|
|
|
(923
|
)
|
|
|
(10,029
|
)
|
|
|
(9,577
|
)
|
|
|
1,129
|
|
|
|
(173
|
)
|
Net cash (used in) provided by
financing activities
|
|
|
(300
|
)
|
|
|
(4,343
|
)
|
|
|
(4,904
|
)
|
|
|
35,127
|
|
|
|
13,574
|
|
|
|
282
|
|
|
|
1,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Decrease) increase in cash and
cash equivalents
|
|
|
(1,905
|
)
|
|
|
(7,219
|
)
|
|
|
(8,868
|
)
|
|
|
25,163
|
|
|
|
(16
|
)
|
|
|
739
|
|
|
|
(1,909
|
)
|
Cash at beginning of period
|
|
|
17,815
|
|
|
|
26,683
|
|
|
|
26,683
|
|
|
|
1,520
|
|
|
|
1,536
|
|
|
|
797
|
|
|
|
2,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at end of period
|
|
$
|
15,910
|
|
|
$
|
19,464
|
|
|
$
|
17,815
|
|
|
$
|
26,683
|
|
|
$
|
1,520
|
|
|
$
|
1,536
|
|
|
$
|
797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
38
UNAUDITED
PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The following unaudited pro forma condensed combined financial
data presents the pro forma combined financial position and
results of operations of us, with Levitt as our wholly-owned
subsidiary, based upon the historical financial statements of
each of us and Levitt, after giving effect to the merger with
Levitt and adjustments described in the accompanying footnotes,
and are intended to reflect the impact of the merger with Levitt
on us. The unaudited pro forma condensed combined financial data
has been developed from (i) our consolidated financial
statements contained in our Annual Report on
Form 10-K
for the year ended December 31, 2006, which are
incorporated by reference into this prospectus, (ii) our
unaudited consolidated financial statements contained in
Amendment No. 1 to our Quarterly Report on Form 10-Q/A
for the quarter ended March 31, 2007, which are
incorporated by reference into this prospectus, (iii) the
consolidated financial statements of Levitt contained in its
Annual Report on
Form 10-K
for the year ended December 31, 2006 and (iv) the
unaudited consolidated financial statements of Levitt contained
in Amendment No. 1 to its Quarterly Report on
Form 10-Q/A for the quarter ended March 31, 2007. The
unaudited pro forma condensed combined financial data is
prepared using the purchase method of accounting, with us
treated as the acquiror and as if the merger with Levitt had
been consummated on March 31, 2007, for purposes of
preparing the unaudited pro forma condensed combined balance
sheet as of March 31, 2007, and on January 1, 2006,
for purposes of preparing the unaudited pro forma condensed
combined statements of operations for the year ended
December 31, 2006 and the three months ended March 31,
2007.
The following unaudited pro forma condensed combined financial
data is provided for illustrative purposes only and does not
purport to represent what our actual consolidated results of
operations or our actual consolidated financial position would
have been had the merger with Levitt occurred on the dates
assumed, nor is the data necessarily indicative of our future
consolidated results of operations or consolidated financial
position. The unaudited pro forma condensed combined financial
data should be read in conjunction with the separate historical
consolidated financial statements and accompanying notes of each
of us and Levitt.
39
UNAUDITED
PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF MARCH 31, 2007
(In thousands, except for share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma
|
|
|
|
|
|
|
Consolidated
|
|
Adjustments(a)
|
|
Pro forma
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
204,609
|
|
|
$
|
|
|
|
$
|
204,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities available for sale (at
fair value)
|
|
|
677,836
|
|
|
|
|
|
|
|
677,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities (approximate
fair value: $291,137)
|
|
|
293,560
|
|
|
|
|
|
|
|
293,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax certificates net of allowance
of $3,782
|
|
|
157,062
|
|
|
|
|
|
|
|
157,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal Home Loan Bank stock, at
cost which approximates fair value
|
|
|
69,503
|
|
|
|
|
|
|
|
69,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans receivable, net of allowance
for loan losses of $50,926
|
|
|
4,619,630
|
|
|
|
|
|
|
|
4,619,630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential loans held for sale
|
|
|
6,235
|
|
|
|
|
|
|
|
6,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate held for development
and sale
|
|
|
871,748
|
|
|
|
(78,931
|
)(b)
|
|
|
792,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate owned
|
|
|
23,135
|
|
|
|
|
|
|
|
23,135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in unconsolidated
affiliates
|
|
|
123,230
|
|
|
|
(13,300
|
)(c)
|
|
|
109,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Properties and equipment, net
|
|
|
317,369
|
|
|
|
(10,033
|
)(d)
|
|
|
307,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and other intangibles
|
|
|
76,937
|
|
|
|
|
|
|
|
76,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax asset
|
|
|
|
|
|
|
55,748
|
(e)
|
|
|
55,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets
|
|
|
82,940
|
|
|
|
(6,871
|
)(f)
|
|
|
76,069
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
7,523,794
|
|
|
$
|
(53,387
|
)
|
|
$
|
7,470,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS
EQUITY Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing deposits
|
|
$
|
1,031,628
|
|
|
$
|
|
|
|
$
|
1,031,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing deposits
|
|
|
3,053,394
|
|
|
|
|
|
|
|
3,053,394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits
|
|
|
4,085,022
|
|
|
|
|
|
|
|
4,085,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer deposits on real estate
held for sale
|
|
|
32,358
|
|
|
|
|
|
|
|
32,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advances from FHLB
|
|
|
1,297,055
|
|
|
|
|
|
|
|
1,297,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short term borrowings
|
|
|
119,513
|
|
|
|
|
|
|
|
119,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated debentures, notes and
bonds payable and junior subordinated debentures
|
|
|
964,729
|
|
|
|
485
|
(g)
|
|
|
965,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities, net
|
|
|
5,943
|
|
|
|
(5,943
|
)(e)
|
|
|
(0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
152,883
|
|
|
|
|
|
|
|
152,883
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
6,657,503
|
|
|
|
(5,458
|
)
|
|
|
6,652,045
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest
|
|
|
689,530
|
|
|
|
(287,517
|
)
|
|
|
402,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock of $.01 par value;
authorized 10,000,000 shares; 5% Cumulative Convertible
Preferred Stock (5% Preferred Stock) issued and
outstanding 15,000 shares in 2006 and 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common stock of $.01
par value, authorized 70,000,000 shares; issued and
outstanding 28,755,904 as adjusted, 66,289,857 shares
issued and outstanding, pro forma
|
|
|
266
|
|
|
|
375
|
|
|
|
641
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class B common stock of $.01
par value, authorized 20,000,000 shares; issued and
outstanding 7,090,652
|
|
|
69
|
|
|
|
|
|
|
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital
|
|
|
93,934
|
|
|
|
239,212
|
|
|
|
333,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained earnings
|
|
|
81,249
|
|
|
|
|
|
|
|
81,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders equity
before accumulated other comprehensive income
|
|
|
175,518
|
|
|
|
239,587
|
(h)
|
|
|
415,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive
income
|
|
|
1,243
|
|
|
|
|
|
|
|
1,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
|
176,761
|
|
|
|
239,587
|
|
|
|
416,348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders equity
|
|
$
|
7,523,794
|
|
|
|
(53,387
|
)
|
|
$
|
7,470,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Pro forma adjustments represent our
acquisition of 83.4% of the difference in the estimated fair
value of Levitts net assets after allocation of negative
goodwill as compared to the corresponding book value. Negative
goodwill resulted from the estimated fair value of acquired net
assets exceeding the assumed purchase price (see footnote h).
Negative goodwill was allocated to various non-financial assets
on a pro-rata basis to reduce the estimated fair value of such
assets. Estimated fair values of Levitts net assets upon
consummation of the merger may be different than as assumed
herein due to fluctuations in the value of the net assets over
time.
|
|
|
|
(b)
|
|
Represents a decrease of
$99.8 million associated with the allocation of negative
goodwill, partially offset by an increase of approximately
$20.8 million to its estimated fair value.
|
|
|
|
(c)
|
|
Represents a decrease of
$13.3 million associated with the allocation of
$12.3 million in negative goodwill and a decrease of
approximately $971,000 based upon the estimated total market
value of the investment in Bluegreen common stock at
March 30, 2007. The estimated total market value of the
investment in Bluegreen was determined by multiplying the
closing price of Bluegreen common stock on March 30, 2007
by the number of shares owned.
|
|
|
|
(d)
|
|
Represents the allocation of
negative goodwill.
|
|
|
|
(e)
|
|
Represents the reversal of our
deferred tax liability of $19.4 million associated with
Levitts undistributed earnings and the deferred tax
consequences of basis differences created by purchase accounting
(approximately $42.3 million.) Basis differences arise
between the historical tax basis of Levitts net assets as
compared to the book value of such assets recorded in purchase
accounting which resulted in reclassifying $55.7 million
from deferred tax liability to deferred tax asset. The deferred
tax asset was computed using an income tax rate of 38.575%.
|
|
|
|
(f)
|
|
Represents write-off of debt
financing costs of $5.3 million and allocation of negative
goodwill of $1.6 million.
|
|
|
|
(g)
|
|
Represents the estimated fair value
of debt obligations based upon current borrowing rates for
similar types of borrowing arrangements.
|
|
|
|
(h)
|
|
The assumed purchase price of
$239.6 million represents the value of consideration for
the merger, including the shares of our Class A Common
Stock exchanged in the merger and cash consideration paid for
costs associated with the merger. The value of our shares
exchanged was calculated at $6.25, determined using the average
of the closing prices of our Class A Common Stock for a few
days prior and subsequent to January 30, 2007, the date the
terms of the merger agreement were finalized and announced.
|
40
UNAUDITED
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2007
AND FOR THE YEAR ENDED DECEMBER 31, 2006
(In thousands, except for share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2007
|
|
For the Year Ended December 31, 2006
|
|
|
|
|
Pro forma
|
|
|
|
|
|
Pro forma
|
|
|
|
|
Reported
|
|
Adjustments
|
|
Pro forma
|
|
Reported
|
|
Adjustments
|
|
Pro forma
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BFC Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend income
|
|
$
|
499
|
|
|
|
|
|
|
$
|
499
|
|
|
$
|
2,249
|
|
|
|
|
|
|
$
|
2,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
951
|
|
|
|
|
|
|
|
951
|
|
|
|
1,433
|
|
|
|
|
|
|
|
1,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,450
|
|
|
|
|
|
|
|
1,450
|
|
|
|
3,682
|
|
|
|
|
|
|
|
3,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend income
|
|
|
93,540
|
|
|
|
|
|
|
|
93,540
|
|
|
|
367,177
|
|
|
|
|
|
|
|
367,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposits
|
|
|
24,595
|
|
|
|
|
|
|
|
24,595
|
|
|
|
90,472
|
|
|
|
|
|
|
|
90,472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other service charges and fees
|
|
|
7,033
|
|
|
|
|
|
|
|
7,033
|
|
|
|
27,542
|
|
|
|
|
|
|
|
27,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
3,939
|
|
|
|
|
|
|
|
3,939
|
|
|
|
22,555
|
|
|
|
|
|
|
|
22,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
129,107
|
|
|
|
|
|
|
|
129,107
|
|
|
|
507,746
|
|
|
|
|
|
|
|
507,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilding & Real
Estate Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of real estate
|
|
|
141,298
|
|
|
|
|
|
|
|
141,298
|
|
|
|
566,086
|
|
|
|
|
|
|
|
566,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend income
|
|
|
553
|
|
|
|
|
|
|
|
553
|
|
|
|
2,474
|
|
|
|
|
|
|
|
2,474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
4,117
|
|
|
|
|
|
|
|
4,117
|
|
|
|
14,592
|
|
|
|
|
|
|
|
14,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
145,968
|
|
|
|
|
|
|
|
145,968
|
|
|
|
583,152
|
|
|
|
|
|
|
|
583,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
276,525
|
|
|
|
|
|
|
|
276,525
|
|
|
|
1,094,580
|
|
|
|
|
|
|
|
1,094,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BFC Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
12
|
|
|
|
|
|
|
|
12
|
|
|
|
30
|
|
|
|
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
|
2,744
|
|
|
|
|
|
|
|
2,744
|
|
|
|
9,407
|
|
|
|
|
|
|
|
9,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses
|
|
|
661
|
|
|
|
|
|
|
|
661
|
|
|
|
2,933
|
|
|
|
|
|
|
|
2,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,417
|
|
|
|
|
|
|
|
3,417
|
|
|
|
12,370
|
|
|
|
|
|
|
|
12,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net of interest
capitalized
|
|
|
46,218
|
|
|
|
|
|
|
|
46,218
|
|
|
|
166,578
|
|
|
|
|
|
|
|
166,578
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for loan losses
|
|
|
7,461
|
|
|
|
|
|
|
|
7,461
|
|
|
|
8,574
|
|
|
|
|
|
|
|
8,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits
|
|
|
41,090
|
|
|
|
|
|
|
|
41,090
|
|
|
|
150,804
|
|
|
|
|
|
|
|
150,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy and equipment
|
|
|
15,944
|
|
|
|
|
|
|
|
15,944
|
|
|
|
57,308
|
|
|
|
|
|
|
|
57,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising and promotion
|
|
|
5,858
|
|
|
|
|
|
|
|
5,858
|
|
|
|
35,067
|
|
|
|
|
|
|
|
35,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses
|
|
|
16,208
|
|
|
|
|
|
|
|
16,208
|
|
|
|
55,980
|
|
|
|
|
|
|
|
55,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
132,779
|
|
|
|
|
|
|
|
132,779
|
|
|
|
474,311
|
|
|
|
|
|
|
|
474,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilding & Real
Estate Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales of real estate
|
|
|
112,908
|
|
|
|
|
|
|
|
112,908
|
|
|
|
482,961
|
|
|
|
|
|
|
|
482,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
expenses
|
|
|
32,645
|
|
|
|
|
|
|
|
32,645
|
|
|
|
120,017
|
|
|
|
|
|
|
|
120,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses
|
|
|
482
|
|
|
|
|
|
|
|
482
|
|
|
|
3,677
|
|
|
|
|
|
|
|
3,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
146,035
|
|
|
|
|
|
|
|
146,035
|
|
|
|
606,655
|
|
|
|
|
|
|
|
606,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and expenses
|
|
|
282,231
|
|
|
|
|
|
|
|
282,231
|
|
|
|
1,093,336
|
|
|
|
|
|
|
|
1,093,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity earnings from unconsolidated
affiliates
|
|
|
2,893
|
|
|
|
|
|
|
|
2,893
|
|
|
|
10,935
|
|
|
|
|
|
|
|
10,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes
and noncontrolling interest
|
|
|
(2,813
|
)
|
|
|
|
|
|
|
(2,813
|
)
|
|
|
12,179
|
|
|
|
|
|
|
|
12,179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit for income taxes
|
|
|
(272
|
)
|
|
|
|
|
|
|
(272
|
)
|
|
|
(528
|
)
|
|
|
|
|
|
|
(528
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest
|
|
|
(915
|
)
|
|
|
(814
|
)(a)
|
|
|
(1,729
|
)
|
|
|
13,404
|
|
|
|
7,643
|
(a)
|
|
|
21,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) from continuing operations
|
|
|
(1,626
|
)
|
|
|
814
|
|
|
|
(812
|
)
|
|
|
(697
|
)
|
|
|
(7,643
|
)
|
|
|
(8,340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operation less income
tax provision (benefit) of $3,405 in 2007 and $(8,958) in 2006
and noncontrolling interest
|
|
|
1,053
|
|
|
|
|
|
|
|
1,053
|
|
|
|
(1,524
|
)
|
|
|
|
|
|
|
(1,524
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
(573
|
)
|
|
|
814
|
|
|
|
241
|
|
|
|
(2,221
|
)
|
|
|
(7,643
|
)
|
|
|
(9,864
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5% Preferred Stock dividends
|
|
|
(188
|
)
|
|
|
|
|
|
|
(188
|
)
|
|
|
750
|
|
|
|
|
|
|
|
750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income allocable to
common stock
|
|
$
|
(761
|
)
|
|
|
814
|
|
|
$
|
53
|
|
|
$
|
(2,971
|
)
|
|
|
(7,643
|
)
|
|
$
|
(10,614
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average number of
common shares outstanding
|
|
|
33,444
|
|
|
|
37,534
|
(b)
|
|
|
70,978
|
|
|
|
33,249
|
|
|
|
37,543
|
(b)
|
|
|
70,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings per common
share
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
$
|
0.00
|
|
|
$
|
(0.10
|
)
|
|
|
|
|
|
$
|
(0.15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Elimination of non-controlling
interest for the three months ended March 31, 2007 and for
the year ended December 31, 2006.
|
|
|
|
(b)
|
|
Represents shares of our
Class A Common Stock that will be issued to Levitts
shareholders in the merger.
|
41
MANAGEMENT
The table below sets forth the names and ages of our directors
and executive officers as well as the positions and offices held
by them. Our board of directors is divided into three classes,
with the members of each class serving three-year terms expiring
at the third annual meeting of our shareholders after their
elections, upon the election and qualification of their
successors. All officers serve until they resign or are replaced
or removed by the board of directors. A summary of the
background and experience of each of these individuals follows
the table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Term as
|
|
|
|
|
|
|
Director
|
Name
|
|
Age
|
|
Position
|
|
Expires
|
|
Alan B. Levan
|
|
|
62
|
|
|
Chairman of the Board, Chief
Executive Officer and President of BFC, Chairman of the Board
and Chief Executive Officer of BankAtlantic Bancorp and Levitt
and Chairman of the Board of BankAtlantic and Bluegreen
|
|
|
2007
|
|
John E. Abdo
|
|
|
63
|
|
|
Vice Chairman of the Board of BFC,
BankAtlantic Bancorp, BankAtlantic and Levitt
|
|
|
2008
|
|
Phil Bakes
|
|
|
61
|
|
|
Managing Director and Executive
Vice President
|
|
|
-
|
|
George P. Scanlon
|
|
|
49
|
|
|
Executive Vice President and Chief
Financial Officer
|
|
|
-
|
|
Maria R. Scheker
|
|
|
49
|
|
|
Chief Accounting Officer
|
|
|
-
|
|
D. Keith Cobb
|
|
|
66
|
|
|
Director of BFC and BankAtlantic
Bancorp
|
|
|
2009
|
|
Oscar Holzmann
|
|
|
64
|
|
|
Director
|
|
|
2008
|
|
Earl Pertnoy
|
|
|
80
|
|
|
Director
|
|
|
2009
|
|
Neil Sterling
|
|
|
55
|
|
|
Director
|
|
|
2007
|
|
Biographical
Information
Alan B. Levan has served as a director and has been the
Chairman of the Board, President and Chief Executive Officer of
BFC or its predecessors since 1978. Mr. Levan formed the
I.R.E. Group (predecessor to BFC) in 1972. He has been Chairman
of the Board and Chief Executive Officer of BankAtlantic Bancorp
since 1994 and served as President of BankAtlantic Bancorp from
1994 to 2007. He has been Chairman of the Board of BankAtlantic
since 1987 and served as President of BankAtlantic from 1987 to
2007. He is Chairman of the Board and Chief Executive Officer of
Levitt and Chairman of the Board of Bluegreen.
John E. Abdo has served as a director of BFC since 1988.
Mr. Abdo has been Vice Chairman of BankAtlantic since April
1987 and Chairman of the Executive Committee of BankAtlantic
since October 1985. He has been a director of BFC since 1988 and
Vice Chairman of the Board of BFC since 1993. He has been a
director and Vice Chairman of the Board of BankAtlantic Bancorp
since 1994. He has been Vice Chairman of the Board of Levitt
since April 2001 and served as President of Levitt from 1985 to
2005. He has been President and Chief Executive Officer of Abdo
Companies, Inc., a real estate development, construction and
brokerage firm, for more than five years. He also has been a
director of Benihana since 1990 and Vice Chairman of Bluegreen
since 2002.
Phil Bakes joined BFC as an Executive Vice President in
January 2004 and was named Managing Director in October 2004.
Immediately before joining BFC, he served from 1991-2003 as
President and co-founder of Sojourn Enterprises, a Miami and New
York-based merchant banking and advisory firm, as well as
Chairman, Chief Executive Officer and co-founder from 1999-2003
of FAR&WIDE Travel Corp., an international leisure travel
company, which in September 2003 liquidated under
Chapter 11 of the U.S. Bankruptcy Code. From
1980-1990, Mr. Bakes was a senior airline industry
executive, including serving as President and Chief Executive
Officer of Continental Airlines and Eastern Airlines.
Mr. Bakes began his professional career in
Washington, D.C. serving as an assistant Watergate
prosecutor, counsel to the Senate Antitrust Subcommittee and
general counsel of a federal agency. Mr. Bakes holds a
Juris Doctor degree from Harvard Law School and a Bachelor of
Arts degree from Loyola University (Chicago).
George P. Scanlon joined BFC as Executive Vice President
and Chief Financial Officer in April 2007. Mr. Scanlon has
served as Executive Vice President and Chief Financial Officer
of Levitt since August 2004 and now serves as Executive Vice
President and Chief Financial Officer of each of BFC and Levitt.
Prior to joining Levitt, Mr. Scanlon was the Chief
Financial Officer of Datacore Software Corporation from December
2001 to August 2004. Datacore is a privately-owned independent
software vendor specializing in storage control, storage
management and storage consolidation. Prior to joining Datacore,
Mr. Scanlon was the Chief Financial Officer of Seisint,
Inc. from November 2000 to September 2001. Seisint was a
privately-owned technology company specializing in providing
data search and processing products. Prior to joining Seisint,
Mr. Scanlon was employed at Ryder System, Inc. from August
1982 to June 2000, serving in a variety of financial positions,
including
42
Senior Vice President Planning and Controller.
Ryder is a publicly-traded Fortune 500 provider of
transportation, logistics and supply chain management services.
Maria R. Scheker was appointed Chief Accounting Officer
of BFC in April 2007. Ms. Scheker joined BFC in 1985 and
has held various positions with the Company during this time,
including Assistant Controller from 1993 through 2003.
Ms. Scheker was appointed Controller of BFC in 2003 and
Senior Vice President of BFC in March 2006. Ms. Scheker has
been a certified public accountant in the State of Florida since
2003.
D. Keith Cobb has served as a director of BFC since
2004. Mr. Cobb has served as a business consultant and
strategic advisor to a number of companies since 1996. In
addition, Mr. Cobb completed a six-year term on the Board
of the Federal Reserve Bank of Miami in 2002. Mr. Cobb
spent thirty-two years as a practicing certified public
accountant at KPMG LLP, and was Vice Chairman and Chief
Executive Officer of Alamo Rent A Car, Inc. from 1995 until its
sale in 1996. Mr. Cobb also serves on the boards of
BankAtlantic Bancorp, Alliance Data Systems, Inc. and several
private companies.
Oscar Holzmann has served as a director of BFC since
2002. Mr. Holzmann has been an Associate Professor of
Accounting at the University of Miami since 1980. He received
his Ph.D. in Business Administration from Pennsylvania State
University in 1974.
Earl Pertnoy has served as a director of BFC or its
predecessors since 1978. Mr. Pertnoy is a real estate
investor and developer.
Neil Sterling has served as a director of BFC since 2003.
Mr. Sterling has been the principal of The Sterling
Resources Group, a business development-consulting firm in
Fort Lauderdale, Florida, since 1998.
Appointments
to our Board of Directors in Connection with the Merger with
Levitt
Pursuant to the terms of the merger agreement with Levitt, we
have agreed to cause each of Messrs. James Blosser, Darwin
Dornbush, S. Lawrence Kahn, III, Alan J. Levy, Joel Levy,
William Nicholson and William Scherer, the seven directors of
Levitt who do not currently serve on our board of directors, to
be appointed to our board of directors in the event of the
consummation of the merger. The following is a summary of the
background and experience of each of these individuals.
James Blosser, age 69, has served as a director of
Levitt since 2001. Mr. Blosser has been an attorney with
the law firm of Blosser & Sayfie since 2001.
Additionally, from 1999 to 2004 he was a partner with the
governmental relations firm of Poole, McKinley &
Blosser. Prior to 1999, he was an Executive Vice President for
Huizenga Holdings, a sports, investment and entertainment
conglomerate in Fort Lauderdale, Florida.
Darwin Dornbush, age 77, has served as a director of
Levitt since 2003. Mr. Dornbush is a senior partner in the
law firm of Dornbush Schaeffer Strongin & Weinstein,
LLP. He has served as the Secretary of Benihana and its
predecessor since 1983, and he has been a director of Benihana
since 1995. Mr. Dornbush has served as Secretary and since
1980 he has been a director of Benihana of Tokyo, the parent
company of Benihana. Mr. Dornbush is also a director of
Cantel Medical Corp., a healthcare company.
S. Lawrence Kahn, III, age 60, has served
as a director of Levitt since 2003. Mr. Kahn has been the
President and Chief Executive Officer since 1986 of Lowell
Homes, Inc., a Florida corporation engaged in the business of
homebuilding. Mr. Kahn also serves as a director of the
Great Florida Bank.
Alan J. Levy, age 67, has served as a director of
Levitt since 2005. Mr. Levy is the founder and, since 1980,
has served as the President and Chief Executive Officer of Great
American Farms, Inc., an agricultural company involved in the
farming, marketing and distribution of a variety of fruits,
vegetables and meat products.
Joel Levy, age 67, has served as a director of
Levitt since 2003. Mr. Levy has been the Vice Chairman of
the Board of Adler Group, Inc., a commercial real estate
company, since 1984 and served as the Chief Operating Officer of
Adler Group, Inc. from 1984 through 2006.
William Nicholson, age 61, has served as a director
of Levitt since 2003. Mr. Nicholson has been a principal
with Heritage Capital Group since 2003. Previously,
Mr. Nicholson served as Managing Director of Bank of
America Securities and Bank of America in the real estate
advisory group.
William Scherer, age 59, has served as a director of
Levitt since 2001. Mr. Scherer has been an attorney in the
law firm of Conrad & Scherer, P.A. since 1974.
43
DESCRIPTION
OF CAPITAL STOCK
The following summary of our capital stock is subject in all
respects to applicable Florida law and our Articles of
Incorporation and By-laws. See Where You Can Find More
Information on page 50.
Our authorized capital stock currently consists of
(i) 70,000,000 shares of Class A Common Stock,
par value $.01 per share, (ii) 20,000,000 shares
of Class B Common Stock, par value $.01 per share, and
(iii) 10,000,000 shares of preferred stock, par value
$.01 per share, of which 15,000 shares have been
designated 5% Cumulative Convertible Preferred Stock and
100,000 shares have been designated Series A Junior
Participating Preferred Stock. In connection with the merger
with Levitt and subject to the approval of our shareholders, we
will increase the number of authorized shares of our
Class A Common Stock under our Articles of Incorporation
from 70,000,000 to 130,000,000. As of May 8, 2007,
28,756,088 shares of our Class A Common Stock,
7,090,653 shares of our Class B Common Stock,
15,000 shares of our 5% Cumulative Convertible Preferred
Stock and no shares of our Series A Junior Participating
Preferred Stock were issued and outstanding.
Voting
Rights
Except as provided by law or as specifically provided in our
Articles of Incorporation, holders of our Class A Common
Stock and Class B Common Stock vote as a single group.
Except as provided by law, the 5% Cumulative Convertible
Preferred Stock has no voting rights. Each share of our
Class A Common Stock is entitled to one vote and our
Class A Common Stock represents in the aggregate 22% of the
total voting power of our Class A Common Stock and
Class B Common Stock. Each share of our Class B Common
Stock is entitled to the number of votes per share which will
represent in the aggregate 78% of the total voting power of the
our Class A Common Stock and Class B Common Stock.
These fixed voting percentages will remain in effect until the
total number of outstanding shares of our Class B Common
Stock falls below 1,800,000. If the total number of outstanding
shares of our Class B Common Stock is less than 1,800,000
but greater than 1,400,000, then our Class A Common Stock
will hold a voting percentage equal to 40% and our Class B
Common Stock will hold a voting percentage equal to the
remaining 60%. If the total number of outstanding shares of our
Class B Common Stock is less than 1,400,000 but greater
than 500,000, then our Class A Common Stock will hold a
voting percentage equal to 53% and our Class B Common Stock
will hold a voting percentage equal to the remaining 47%. If the
total number of outstanding shares of our Class B Common
Stock is less than 500,000, then each share of our Class A
Common Stock and Class B Common Stock will be entitled to
one vote.
Under Florida law, holders of our Class A Common Stock are
entitled to vote as a separate voting group, and would therefore
have an effective veto power, on amendments to our Articles of
Incorporation which would have any of the following effects:
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effect an exchange or reclassification of all or part of the
shares of our Class A Common Stock into shares of another
class;
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effect an exchange or reclassification, or create a right of
exchange, of all or part of the shares of another class into
shares of our Class A Common Stock;
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change the designation, rights, preferences, or limitations of
all or part of the shares of our Class A Common Stock;
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change all or part of the shares of our Class A Common
Stock into a different number of shares of Class A Common
Stock;
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create a new class of shares which have rights or preferences
with respect to distributions or to dissolution that are prior,
superior, or substantially equal to the shares of our
Class A Common Stock;
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increase the rights, preferences, or number of authorized shares
of any class that, after giving effect to the amendment, have
rights or preferences with respect to distributions or to
dissolution that are prior, superior, or substantially equal to
the shares of our Class A Common Stock;
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limit or deny an existing preemptive right of all or part of the
shares of our Class A Common Stock; or
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cancel or otherwise affect rights to distributions or dividends
that have accumulated but not yet been declared on all or part
of the shares of our Class A Common Stock.
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Under Florida Law, holders of our Class B Common Stock or
5% Cumulative Convertible Preferred Stock are each entitled to
vote as a separate voting group and would therefore have
effective veto power on
44
amendments to our Articles of Incorporation which would affect
the rights of the holders of our Class B Common Stock or 5%
Cumulative Convertible Preferred Stock in substantially the same
manner as described above.
Holders of our Class A Common Stock, Class B Common
Stock and 5% Cumulative Convertible Preferred Stock each are
also entitled to vote as a separate voting group on any plan of
merger or plan of share exchange which contains a provision
which, if included in a proposed amendment to our Articles of
Incorporation, would require their vote as a separate voting
group.
In addition to the rights afforded to our shareholders under
Florida law, our Articles of Incorporation provide that the
approval of the holders of our Class B Common Stock, voting
as a separate voting group, will be required before any of the
following actions may be taken:
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the issuance of any additional shares of Class B Common
Stock, other than a stock dividend issued to holders of our
Class B Common Stock;
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the reduction of the number of outstanding shares of our
Class B Common Stock (other than upon conversion of our
Class B Common Stock into our Class A Common Stock or
upon a voluntary disposition to us); or
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any amendments of the voting rights provisions of our Articles
of Incorporation.
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Convertibility
of Class B Common Stock and 5% Cumulative Convertible
Preferred Stock
Holders of our Class B Common Stock possess the right, at
any time, to convert any or all of their shares into shares of
our Class A Common Stock on a
share-for-share
basis.
Holders of our 5% Cumulative Convertible Preferred Stock have
the option at any time on or after April 30, 2007 to
convert their shares into shares of our Class A Common
Stock, with the number of shares determined by dividing the
stated value of $1,000 per share by the conversion price of
$9.60 per share of Class A Common Stock. The
conversion price is subject to customary anti-dilution
adjustments.
Dividends
and Other Distributions; Liquidation Rights
Holders of our Class A Common Stock and Class B Common
Stock are entitled to receive cash dividends, when and as
declared by our board of directors out of legally available
assets. Any distribution per share with respect to our
Class A Common Stock will be identical to the distribution
per share with respect to our Class B Common Stock, except
that a stock dividend or other non-cash distribution to holders
of our Class A Common Stock may be declared and issued only
in the form of Class A Common Stock while a dividend or
other non-cash distribution to holders of our Class B
Common Stock may be declared and issued in the form of either
Class A Common Stock or Class B Common Stock at the
discretion of our board of directors, provided that the number
of any shares so issued or any non-cash distribution is the same
on a per share basis. No dividend or other distribution (other
than a dividend or distribution payable solely in common stock)
shall be paid on or set apart for payment on our common stock
until such time as all accrued and unpaid dividends on our 5%
Cumulative Convertible Preferred Stock have been or
contemporaneously are declared or paid and a sum is set apart
sufficient for payment of such accrued and unpaid dividends.
Holders of our 5% Cumulative Convertible Preferred Stock are
entitled to receive, when and as declared by our board of
directors, cumulative quarterly cash dividends on each such
share at a rate per annum of 5% of the stated value of
$1,000 per share from the date of issuance.
The 5% Cumulative Convertible Preferred Stock liquidation
preference in the event of our voluntary liquidation or winding
up is equal to its stated value of $1,000 per share plus
any accumulated and unpaid dividends or an amount equal to the
redemption price described below under Preemptive or
Payment Rights; Redemption of 5% Cumulative Convertible
Preferred Stock. Upon any liquidation, the assets legally
available for distribution to our shareholders after payment of
the 5% Cumulative Convertible Preferred Stock liquidation
preference will be distributed ratably among the holders of our
Class A Common Stock and Class B Common Stock.
Preemptive
or Payment Rights; Redemption of 5% Cumulative Convertible
Preferred Stock
Holders of our common stock have no preemptive or other
subscription rights, and there are no redemption or sinking fund
provisions relating to shares of our common stock. Holders of
shares of our 5%
45
Cumulative Convertible Preferred Stock have no preemptive or
other subscription rights, and there is no sinking fund
provision relating to the shares of 5% Cumulative Convertible
Preferred Stock.
The shares of our 5% Cumulative Convertible Preferred Stock may
be redeemed at our option at any time and from time to time at
redemption prices ranging from $1,040 per share for the
year 2007 to $1,000 per share for the year 2015 and
thereafter.
Certain
Anti-Takeover Effects
The terms of our common stock make our sale or transfer of
control or the removal of our incumbent directors unlikely
without the concurrence of the holders of our Class B
Common Stock. Our Articles of Incorporation and By-laws also
contain other provisions which could have anti-takeover effects.
These provisions include, without limitation:
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the provisions in our Articles of Incorporation regarding the
voting rights of our Class B Common Stock;
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the authority of our board of directors to issue additional
shares of preferred stock and to fix the relative rights and
preferences of the preferred stock without additional
shareholder approval;
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the fact that our board of directors has in the past declared,
and has the authority to and may in the future declare, a
dividend distribution of Series A Preferred Stock purchase
rights, which distribution will cause substantial dilution to a
person or group who attempts to acquire the Company on terms not
approved by our board of directors;
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the division of our board of directors into three classes of
directors with three-year staggered terms; and
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the advance notice procedures to be complied with by our
shareholders in order to make shareholder proposals or nominate
directors.
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46
UNDERWRITING
The underwriters named below, JMP Securities LLC,
Oppenheimer & Co. Inc., Sanders Morris Harris Inc. and
Ladenburg Thalmann & Co. Inc., acting through their
representatives, have severally agreed with us, subject to the
terms and conditions of the underwriting agreement, to purchase
from us the number of shares of Class A Common Stock set
forth below opposite their respective names. The underwriters
are committed to purchase and pay for all shares if any are
purchased.
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Number of
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Underwriter
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Shares
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JMP Securities LLC
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Oppenheimer & Co.
Inc.
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Sanders Morris Harris Inc.
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Ladenburg Thalmann & Co.
Inc.
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Total
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Commissions
and Discounts
The representatives have advised us that the underwriters
propose to offer the shares of Class A Common Stock to the
public at the public offering price set forth on the cover page
of this prospectus and to certain dealers at that price less a
concession not in excess of $ per
share, of which $ may be reallowed
to other dealers. After this offering, the public offering
price, concession and reallowance to dealers may be reduced by
the representatives. No such reduction shall change the amount
of proceeds to be received by us as set forth on the cover page
of this prospectus. The common stock is offered by the
underwriters as stated herein, subject to receipt and acceptance
by them and subject to their right to reject any order in whole
or in part.
Over-Allotment
Option
We have granted to the underwriters an option, exercisable
during the
30-day
period after the date of this prospectus, to purchase up to
1,500,000 additional shares of Class A Common Stock, to
cover over-allotments, if any, at the public offering price less
the underwriting discount set forth on the cover page of this
prospectus. If the underwriters exercise their over-allotment
option to purchase any of the additional 1,500,000 shares
of Class A Common Stock, the underwriters have severally
agreed, subject to certain conditions, to purchase approximately
the same percentage thereof as the number of shares to be
purchased by each of them bears to the total number of shares of
Class A Common Stock offered in this offering. If
purchased, these additional shares will be sold by the
underwriters on the same terms as those on which the shares
offered hereby are being sold. We will be obligated, pursuant to
the over-allotment option, to sell shares to the underwriters to
the extent the over-allotment option is exercised. The
underwriters may exercise the over-allotment option only to
cover over-allotments made in connection with the sale of the
shares of Class A Common Stock offered in this offering.
The following table summarizes the compensation to be paid to
the underwriters:
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Total
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Without
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With
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Per
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Over-
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Share
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allotment
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allotment
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Underwriting discounts and
commissions payable by us
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$
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$
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$
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We estimate that expenses payable by us in connection with this
offering, other than the underwriting discounts and commissions
referred to above, will be approximately $450,000.
Indemnification
The underwriting agreement contains covenants of indemnity among
the underwriters and us against certain civil liabilities,
including liabilities under the Securities Act, and liabilities
arising from breaches of representations and warranties
contained in the underwriting agreement.
47
Lock-Up
Agreements
Each of our executive officers and directors have agreed,
subject to specified exceptions, not to offer to sell, contract
to sell, or otherwise sell, dispose of, loan, pledge or grant
any rights with respect to any shares of Class A Common
Stock or any options or warrants to purchase any shares of
Class A Common Stock, or any securities convertible into or
exchangeable for shares of common stock owned as of the date of
this prospectus or thereafter acquired directly by those holders
or with respect to which they have the power of disposition,
without the prior written consent of JMP Securities LLC. This
restriction terminates after the close of trading of the shares
on the 180th day after the date of this prospectus. However, JMP
Securities LLC may, in its sole discretion and at any time or
from time to time before the termination of such
180-day
period, without notice, release all or any portion of the
securities subject to
lock-up
agreements. There are no existing agreements between the
representatives and any of our stockholders who have executed a
lock-up
agreement providing consent to the sale of shares prior to the
expiration of the
lock-up
period.
The 180-day
restricted period described in the preceding paragraph will be
automatically extended if: (1) during the last 17 days
of the
180-day
restricted period, we issue an earnings release or material news
or a material event relating to us occurs; or (2) prior to
the expiration of the
180-day
restricted period, we announce that we will release earnings
results during the
16-day
period beginning on the last day of the restricted period, in
which case the restrictions described in the preceding paragraph
will continue to apply until the expiration of the
18-day
period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
In addition, we have agreed that, subject to certain exceptions
and the issuances of shares of Class A Common Stock in this
offering and in connection with the proposed merger with Levitt,
during the
lock-up
period we will not, without the prior written consent of JMP
Securities LLC, (i) consent to the disposition of any
shares of Class A Common Stock held by stockholders subject
to lock-up
agreements prior to the expiration of the
lock-up
period or (ii) issue, sell, contract to sell, or otherwise
dispose of, any shares of Class A Common Stock, any options
or warrants to purchase any shares of Class A Common Stock
or any securities convertible into, exercisable for or
exchangeable for shares of Class A Common Stock.
Syndicate
Short Sales
The representatives have advised us that, on behalf of the
underwriters, they may make short sales of our Class A
Common Stock in connection with this offering, resulting in the
sale by the underwriters of a greater number of shares than they
are required to purchase pursuant to the underwriting agreement.
The short position resulting from those short sales will be
deemed a covered short position to the extent that
it does not exceed the shares subject to the underwriters
over-allotment option and will be deemed a naked
short position to the extent that it exceeds that number. A
naked short position is more likely to be created if
the underwriters are concerned that there may be downward
pressure on the trading price of the Class A Common Stock
in the open market that could adversely affect investors who
purchased shares in the offering. The underwriters may reduce or
close out their covered short position either by exercising the
over-allotment option or by purchasing shares in the open
market. In determining which of these alternatives to pursue,
the underwriters will consider the price at which shares are
available for purchase in the open market as compared to the
price at which they may purchase shares through the
over-allotment option. Any naked short position will
be closed out by purchasing shares in the open market. Similar
to the other stabilizing transactions described below, open
market purchases made by the underwriters to cover all or a
portion of their short position may have the effect of
preventing or retarding a decline in the market price of our
Class A Common Stock following this offering. As a result,
our Class A Common Stock may trade at a price that is
higher than the price that otherwise might prevail in the open
market.
Stabilization
The representatives have advised us that, pursuant to
Regulation M under the Securities Act, they may engage in
transactions, including stabilization bids or the imposition of
penalty bids, that may have the effect of stabilizing or
maintaining the market price of the shares of Class A
Common Stock at a level above that which might otherwise prevail
in the open market. A stabilization bid is a bid for
or the purchase of shares of Class A Common Stock on behalf
of the underwriters for the purpose of fixing or maintaining the
price of such stock. A penalty bid is an arrangement
permitting the representatives to claim the selling concession
otherwise accruing
48
to an underwriter or syndicate member in connection with the
offering if the Class A Common Stock originally sold by
that underwriter or syndicate member is purchased by the
representatives in the open market pursuant to a stabilizing bid
or to cover all or part of a syndicate short position. The
representatives have advised us that stabilizing bids and open
market purchases may be effected on the NYSE Arca or otherwise
and, if commenced, may be discontinued at any time.
Passive
Market Making
In connection with this offering and before the commencement of
offers or sales of the Class A Common Stock, certain
underwriters who are qualified market makers on the NYSE Arca
may engage in passive market making transactions in the
Class A Common Stock on the NYSE Arca in accordance with
Rule 103 of Regulation M under the Exchange Act during
the business day prior to the pricing of the offering. Passive
market makers must comply with applicable volume and price
limitations and must be identified as such. In general, a
passive market maker must display its bid at a price not in
excess of the highest independent bid for such security; if all
independent bids are lowered below the passive market
makers bid, however, such bid must then be lowered when
certain purchase limits are exceeded.
Other
Relationships
The underwriters will not execute sales in discretionary
accounts without the prior written specific approval of the
customers.
Certain of the underwriters and their respective affiliates may
in the future perform various financial advisory, investment
banking or other services for BFC or its affiliates, for which
they will receive customary fees and expenses.
49
LEGAL
MATTERS
The validity of the Class A Common Stock offered hereby
will be passed upon for us by Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A., Miami, Florida. Certain
legal matters in connection with the offering will be passed
upon for the underwriters by Goodwin Procter LLP, Boston,
Massachusetts.
EXPERTS
The consolidated financial statements of BFC Financial
Corporation, except as they relate to Bluegreen Corporation, and
managements assessment of the effectiveness of internal
control over financial reporting (which is included in
Managements Report on Internal Control over Financial
Reporting) incorporated in this prospectus by reference to
BFCs Annual Report on Form 10-K for the year ended
December 31, 2006, have been so incorporated in reliance on
the report of PricewaterhouseCoopers LLP, an independent
registered certified public accounting firm, given on the
authority of said firm as experts in auditing and accounting.
The financial statements of Bluegreen Corporation, not
separately presented in this prospectus, have been audited by
Ernst & Young LLP, an independent registered public
accounting firm, whose report thereon given on the authority of
said firm as experts in auditing and accounting is incorporated
by reference herein.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read and copy any
reports, statements or other information that we file with the
SEC at the SECs public reference room at the following
location:
Public Reference Room
100 F Street, N.E.
Room 1024
Washington, D.C. 20549
Please call the SEC at
1-800-SEC-0330
for further information on the public reference room. These
SEC filings are also available to the public from commercial
document retrieval services and at the website maintained by the
SEC at http://www.sec.gov. Our Class A Common Stock is
quoted on the NYSE Arca and reports, proxy statements and other
information concerning us may be inspected at the offices of
NYSE Arca, Inc. at 100 South Wacker Drive, Chicago,
Illinois 60606. Additional information about us may be found
at
http://www.bfcfinancial.com. The information found on, or
otherwise accessible through, our website is not incorporated
into, and does not form a part of, this prospectus or any other
report or document we file or
furnish with the SEC.
We have filed a registration statement on
Form S-3
with the SEC covering the Class A Common Stock offered by
this prospectus. This prospectus, which forms a part of the
registration statement, does not contain all of the information
included in the registration statement. For further information
about us and our Class A Common Stock you should refer to
the registration statement and its exhibits. You can obtain the
full registration statement from the SEC as indicated above.
50
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference in
this prospectus certain information we file with the SEC. This
permits us to disclose important information in this prospectus
by referring you to the document that contains the information.
The information incorporated by reference is an important part
of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below that we
filed, or may in the future file, with the SEC:
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our Annual Report on
Form 10-K
for the year ended December 31, 2006, filed with the SEC on
March 16, 2007;
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Amendment No. 1 to our Annual Report on Form 10-K/A
for the year ended December 31, 2006, filed with the SEC on
April 27, 2007;
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our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2007, filed with the SEC on May 10, 2007;
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Amendment No. 1 to our Quarterly Report on Form 10-Q/A
for the quarter ended March 31, 2007, filed with the SEC on
May 17, 2007;
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our Current Report on
Form 8-K
filed with the SEC on January 31, 2007 (Item 1.01 and
Exhibit 2.1 only);
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our Current Report on Form 8-K filed with the SEC on
March 29, 2007;
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our Current Report on Form 8-K filed with the SEC on
April 4, 2007;
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our Current Report on Form 8-K filed with the SEC on
May 17, 2007;
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the description of our Class A Common Stock, par value
$0.01 per share, contained in our Registration Statement on
Form 8-A,
filed with the SEC on October 16, 1997 and any amendment or
report filed with the SEC for the purpose of updating the
description; and
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any future filings made with the SEC under Sections 13(a),
13(c), 14 or 15(d) under the Securities Exchange Act of 1934
until we sell all of the Class A Common Stock under this
prospectus.
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You may request a copy of these filings at no cost by writing or
telephoning us at:
BFC Financial Corporation
2100 West Cypress Creek Road
Fort Lauderdale, Florida 33309
Attention: Secretary
Telephone Number:
(954) 940-4900
You should rely only on the information incorporated by
reference or provided in this prospectus. We have not authorized
anyone else to provide you with different information. We are
not making an offer of the Class A Common Stock in any
state where the offer is not permitted. You should not assume
that the information in this prospectus is accurate as of any
date other than the date on the front of this prospectus.
51
BFC
Financial Corporation
10,000,000 Shares
Class A
Common Stock
PROSPECTUS
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Ladenburg Thalmann & Co.
Inc.
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,
2007
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
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Item 14.
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Other
Expenses of Issuance and Distribution
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The following table sets forth the expenses (other than
underwriting discounts and commissions) to be borne by BFC
Financial Corporation (the Registrant) in connection
with the offering. All of the amounts shown are estimates except
the SEC registration fee.
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SEC Registration Fee
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$
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1,642
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Legal Fees and Expenses
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200,000
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Accounting Fees and Expenses
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100,000
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Printing and Mailing Expenses
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|
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100,000
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Miscellaneous Expenses
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48,358
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TOTAL FEES AND EXPENSES
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$
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450,000
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Item 15.
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Indemnification
of Directors and Officers
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Section 607.0850 of the Florida Business Corporation Act
and the Articles of Incorporation and By-laws of the Registrant
provide for indemnification of each of the Registrants
directors and officers against claims, liabilities, amounts paid
in settlement and expenses if such director or officer is or was
a party to any proceeding by reason of the fact that such person
is or was a director or officer of the Registrant or is or was
serving as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise at the
request of the Registrant, which may include liabilities under
the Securities Act of 1933, as amended (the Securities
Act). In addition, the Registrant carries insurance
permitted by the laws of the State of Florida on behalf of its
directors, officers, employees or agents which covers alleged or
actual error or omission, misstatement, misleading misstatement,
neglect or breach of fiduciary duty while acting solely as a
director or officer of the Registrant, which acts may also
include liabilities under the Securities Act.
The following exhibits either are filed herewith or will be
filed by amendment, as indicated below:
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Exhibits
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Description
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1
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.1
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Form of Underwriting Agreement
between the Registrant and the Underwriters named therein.*
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5
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.1
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Opinion of Stearns Weaver Miller
Weissler Alhadeff & Sitterson, P.A. as to the validity
of the shares of Class A Common Stock being offered.
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12
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.1
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Statement Regarding Computation of
Ratio of Earnings to Fixed Charges.
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23
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.1
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Consent of Stearns Weaver Miller
Weissler Alhadeff & Sitterson, P.A. (included in
Exhibit 5.1).
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23
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.2
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Consent of PricewaterhouseCoopers
LLP.
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23
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.3
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Consent of Ernst & Young
LLP.
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24
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.1
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Power of Attorney (included with
signature page to the initial filing of this Registration
Statement).
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*
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To be filed by amendment.
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(a) The Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrants annual report
pursuant to section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plans annual report pursuant
to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the
II-1
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
(c) The Registrant hereby undertakes that:
(1) For purposes of determining any liability under
the Securities Act of 1933, the information omitted from the
form of prospectus filed as part of this registration statement
in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this Registration Statement as
of the time it was declared effective.
(2) For the purpose of determining any liability
under the Securities Act of 1933, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this Amendment No. 1 to the
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of
Fort Lauderdale, State of Florida, on the 17th day of
May, 2007.
BFC FINANCIAL CORPORATION
Alan B. Levan,
Chairman of the Board of Directors, Chief
Executive Officer and President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been
signed by the following persons in the capacities and on the
dates indicated.
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Signature
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Title
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Date
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/s/ Alan
B. Levan
Alan
B. Levan
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Chairman of the Board, Chief
Executive Officer and President
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May 17, 2007
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*
John
E. Abdo
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Vice-Chairman of the Board
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May 17, 2007
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/s/ George
P. Scanlon
George
P. Scanlon
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Executive Vice President and Chief
Financial Officer
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May 17, 2007
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/s/ Maria
R. Scheker
Maria
R. Scheker
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Chief Accounting Officer
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May 17, 2007
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*
Oscar
Holzmann
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Director
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May 17, 2007
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*
Neil
Sterling
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Director
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May 17, 2007
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Earl
Pertnoy
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Director
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*
D.
Keith Cobb
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Director
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May 17, 2007
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*By:
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/s/ Alan
B. Levan
Alan
B. Levan,
Attorney-in-fact
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INDEX TO
EXHIBITS
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Exhibits
|
|
Description
|
|
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5
|
.1
|
|
Opinion of Stearns Weaver Miller
Weissler Alhadeff & Sitterson, P.A. as to the validity of
the shares of Class A Common Stock being offered.
|
|
12
|
.1
|
|
Statement Regarding Computation of
Ratio of Earnings to Fixed Charges.
|
|
23
|
.1
|
|
Consent of Stearns Weaver Miller
Weissler Alhadeff & Sitterson, P.A. (included in
Exhibit 5.1).
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23
|
.2
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Consent of PricewaterhouseCoopers
LLP.
|
|
23
|
.3
|
|
Consent of Ernst & Young
LLP.
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24
|
.1
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Power of Attorney (included with
signature page to the initial filing of this Registration
Statement).
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